Bill Text: CA SB56 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Alcoholic beverages: retail licensees: beer returns.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2018-03-03 - Last day to consider Governor’s veto pursuant to Joint Rule 58.5. [SB56 Detail]

Download: California-2017-SB56-Amended.html

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Amended  IN  Senate  March 22, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 56

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Introduced by Senator Mendoza

December 05, 2016

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An act to repeal Section 23792 of amend Sections 25503.6 and 22503.8 of, and to add Section 23396.4 to, the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL'S DIGEST

SB 56, as amended, Mendoza. Alcoholic beverage licensees: restrictions. sports entertainment facilities.

The Alcoholic Beverage Control Act contains various provisions regulating the application for, the issuance of, the suspension of, and the conditions imposed upon alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law provides for various annual fees for the issuance of alcoholic beverage licenses, depending upon the type of license issued. Existing law additionally authorizes specified alcoholic beverage licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owner’s advertising rights, or major tenant of specified facilities.

This bill would authorize the Department of Alcoholic Beverage Control to issue a sports entertainment facility permit (SEF permit) that would allow the permitholder to sell beer, wine, and distilled spirits, or a combination thereof, at retail for consumption on the premises in a sports entertainment facility, as defined. The bill would impose a fee for the permit, which would be deposited in the Alcohol Beverage Control Fund. The bill would also make the above-described provisions relating to the purchase of advertising time and space inoperative as of January 1, 2023, and instead provide for those purchases with revised parameters, including that the parties submit a notification to the department relating to the agreement to purchase advertising time and space.

The Alcoholic Beverage Control Act contains various provisions regulating the application for, the issuance of, the suspension of, and the conditions imposed upon, alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law prohibits the issuance of a license, other than an on-sale beer license, for premises situated more than one mile outside the limits of an incorporated city and within 2 miles of any camp or establishment of men, numbering 25 or more, engaged upon or in connection with the construction, repair, or operation of any work, improvement, or utility of a public or quasi-public character.

This bill would repeal that prohibition, thus authorizing the department to issue any type of license for premises situated in the above-described location.

Digest Key

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

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Bill Text

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

SECTION 1.

 Section 23396.4 is added to the Business and Professions Code, to read:

23396.4.

 (a) For purposes of this section:

(1) “Agreement” includes any amendment, modification, other revision, or extensions to the agreement if it relates in any manner to the purchase of advertising space and time at the sports entertainment facility from the owner or major tenant of the facility.

(2) “Authorized licensee” means a winegrower, rectifier, California winegrower’s agent, beer manufacturer, holder of an out-of-state beer manufacturer’s certificate, 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’s general license, craft distiller, or holder of a beer and wine importer’s general license.

(3) “Existing agreement” means an agreement in effect on January 1, 2017, and which continues in effect on and after the effective date of this article, with an authorized licensee for its purchase of advertising space and time at a facility described in Section 25503.6 or in subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8, as those provisions read on January 1, 2017, regardless if that section or subparagraph is later repealed or made inoperative.

(4) “On-sale licensee” means a person holding an SEF permit to sell, serve, and allow consumption of alcoholic beverages on the premises of a sports entertainment facility.

(5) “Retail licensee” means a retailer licensed to sell alcoholic beverages to consumers.

(6) “SEF permit” means a sports entertainment facility permit issued pursuant to this article.

(7) “Sports entertainment facility” means a publicly or privately owned stadium, coliseum, motor speedway, or a fully enclosed arena that is a permanent structure, with a fixed seating capacity of 5,000 seats or more where sporting or entertainment events are presented for a price of admission. The facility does not have to be used exclusively for sporting or entertainment events. A “sports entertainment facility” also means any facility described in Section 25503.6 or subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8 as those sections read on January 1, 2017, even if that section or subparagraph is later repealed or made inoperative.

(b) (1) The department may issue an SEF permit to sell beer, wine, beer and wine, or beer, wine, and distilled spirits at retail for consumption upon the sports entertainment facility premises only. Except as provided in paragraph (3), only a retail licensee holding an SEF permit is authorized to sell alcoholic beverages at retail for consumption on the premises of the sports entertainment facility.

(2) The fee for an SEF permit shall be consistent with the fee for a caterer’s permit issued pursuant to Section 23399 to cover the reasonable administrative costs of the department.

(3) An SEF permit may be issued to a retail licensee providing alcoholic beverage service at a sports entertainment facility. An existing retail licensee providing alcoholic beverages at a sports entertainment facility as of the effective date of this section shall obtain an SEF permit within 12 months of the effective date of this section if that retail licensee provides alcoholic beverage service at the facility on or after the effective date of this section.

(4) For purposes of Section 23790, an existing retail licensee for a sports entertainment facility who is seeking an SEF permit shall be deemed to have complied with the conditions of that section.

(c) (1) The SEF permit is subject to all of the following conditions:

(A) Except as otherwise provided in this section, an on-sale licensee shall not enter into any agreement with any authorized licensee for the purchase of advertising space and time at the sports entertainment facility, including the premises of the on-sale licensee.

(B) (i) For any sports entertainment facility at which an authorized licensee has entered into an agreement with the owner or major tenant of the facility for the purchase of advertising space and time at the facility, any on-sale licensee at the facility shall offer to sell and serve other brands of beer distributed by a competing wholesaler that are not the brands of beer sold, manufactured, or marketed by an authorized licensee, other brands of wine distributed by a competing wholesaler that are not the brands of wine sold, manufactured, or marketed by an authorized licensee, and other brands of distilled spirits distributed by a competing wholesaler that are not the brands sold, manufactured, or marketed by an authorized licensee that purchased the advertising space and time. An on-sale licensee may also offer to sell and serve brands of beer or wine that are manufactured and provided by an unaffiliated, competing licensed beer manufacturer or winegrower that are not the brands of beer or wine sold, manufactured, or marketed by an authorized licensee that purchased the advertising space and time. Nothing in this provision is intended to establish any new privileges of distribution of alcoholic beverages that do not otherwise exist in this division.

(ii) For the purpose of this subparagraph, brands of an authorized licensee purchasing the advertising space and time shall mean brands of beer, wine, or distilled spirits that are sold, manufactured, or marketed by the authorized licensee or sold, manufactured, or marketed by any subsidiary or other business entity of the authorized licensee that the authorized licensee owns, manages, or controls.

(2) Where there is an existing agreement on January 1, 2017, with an authorized licensee for the purchase of advertising space and time at a facility described in Section 25503.6 or in subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8, as those provisions read on January 1, 2017, paragraph (1) of this subdivision shall not be applicable to that facility. In that case, for the duration of that existing agreement, the facility and the sale of any alcoholic beverages on the facility shall be subject to the provisions of Section 25503.6 or 25503.8, as applicable, as those sections read on January 1, 2017, regardless if Section 25503.6 or subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8 is later repealed or made inoperative.

(3) An authorized licensee with an existing agreement covered by paragraph (2) shall notify the department within 45 days of the effective date of this section of any existing agreement. The notification and any statement in the notification shall not be under penalty of perjury. The notification shall include the following:

(A) The basis for treating the facility that is the subject of the advertising agreement as a facility described in Section 25503.6 or subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8, as those provisions read on January 1, 2017.

(B) A statement that the authorized licensee has an existing agreement for the purchase of advertising space and time at the facility that was in effect on January 1, 2017, and continues in effect on and after the effective date of this section.

(C) The name and address of the facility, the names of the parties to the existing agreement, and the beginning and end dates of that agreement.

(4) When an existing agreement covered by paragraph (2) is modified, renewed, or extended, or a new agreement for advertising space and time at the facility is entered into on or after the effective date of this section, the facility and any alcoholic beverages sold at the facility shall be subject to paragraph (1). The authorized licensee shall notify the department within 30 days of any amendment, extension, modification, or renewal of the existing agreement, and of any new agreement, entered into on or after the effective date of this section. The notification shall not be under penalty of perjury.

(5) A violation of any provision of this section or the filing of a false declaration shall be subject to license suspension by the department.

(d) Notwithstanding any other provision of law, and except as provided in paragraph (7), an authorized licensee may purchase advertising space and time at a sports entertainment facility from the owner or major tenant of the facility that is not a retail licensee or an on-sale licensee under this section, subject to the following conditions:

(1) The purchase of advertising space and time shall be conducted pursuant to a written agreement entered into by the authorized licensee and the owner or major tenant of the facility containing all the terms and conditions of that purchase.

(2) (A) The authorized licensee shall submit to the department within 30 days of execution of the agreement a notification stating that the authorized licensee has entered into a written agreement for the purchase of advertising space and time at a sports entertainment facility pursuant to and in compliance with the provisions of this section, along with a fee of two thousand five hundred dollars ($2,500) to cover the reasonable administrative costs of the department. The authorized licensee shall notify the department within 30 days of any amendment, extension, modification, or renewal of that agreement or of any new agreement.

(B) The notification shall also include the following:

(i) The name and address of the sports entertainment facility and the basis for deeming the facility to qualify as a sports entertainment facility.

(ii) The names of the parties to the agreement and the beginning and end dates of the agreement.

(iii) Whether the agreement contains or does not contain any term or condition prohibited by paragraph (3).

(iv) The name and license number of any licensee serving alcoholic beverages at the facility.

(C) The declaration required by subparagraphs (A) and (B) shall not be under penalty of perjury. Failure to comply with this subparagraph or the filing of a false declaration shall be subject to license suspension by the department.

(3) The agreement shall not contain any of the following terms or conditions:

(A) The agreement is conditioned on the purchase or sale of the authorized licensee’s brands of alcoholic beverages by an on-sale licensee for the facility or limits the purchase and sale of competing brands of alcoholic beverages manufactured, distributed, sold, or marketed by other authorized licensees at the facility by the on-sale licensee.

(B) The agreement provides for anything of value to be furnished, directly or indirectly, to an on-sale licensee.

(C) Any term or condition that violates any provision of this division.

(4) The agreement shall not, directly or indirectly, require or result in a licensee that is not an authorized licensee to underwrite, share in, or contribute to, to the purchase or implementation costs of an authorized licensee’s agreement for advertising space and time at a sports entertainment facility, or any other related costs.

(5) In monitoring the impacts of any agreements authorized by this article, the department may conduct audits to determine compliance with this section. Audits may include, but are not limited to, brand selection at the sports entertainment facility, purchase patterns of the on-sale licensee, and review of any agreement or amendments to an agreement or any other contractual or financial arrangement, written or oral, between or among the parties to the agreement and the on-sale licensee, including any affiliated business of the on-sale licensee or any affiliated business of the authorized licensee.

(6) The department shall penalize a violation of any provision of this section by the suspension of the authorized licensee’s license or by a fine equal to the contract value of the agreement for advertising.

(7) (A) Where there is an existing agreement on January 1, 2017, with an authorized licensee for the purchase of advertising space and time at a facility described in Section 25503.6 or subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8, as those provisions read on January 1, 2017, this section shall not be applicable to that facility. In that case, for the duration of that existing agreement, the facility shall be subject to the provisions of Section 25503.6 or 25503.8, as applicable, as those provisions read on January 1, 2017, regardless if Section 25503.6 or subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8 is later repealed or made inoperative.

(B) For any existing agreement covered by subparagraph (A), the authorized licensee in the agreement shall notify the department of the existing agreement within 45 days of the effective date of this section. The notification shall also include the following:

(i) The basis for treating the facility that is the subject of the advertising agreement as a facility described in Section 25503.6 or subparagraph (F) of paragraph (1) of subdivision (a) of Section 25503.8, as those provisions read on January 1, 2017.

(ii) A statement that the authorized licensee has an existing agreement for the purchase of advertising space and time at the facility that was in effect on January 1, 2017, and continues in effect on and after the effective date of this section.

(iii) The name and address of the facility, the names of the parties to the existing agreement, and the beginning and end dates of that existing agreement.

(iv) The name and license number of any licensee serving alcoholic beverages at the facility.

(C) The authorized licensee shall notify the department within 30 days of any amendment, extension, modification, or renewal of an existing agreement covered by subparagraph (A), and of any new agreement, that is entered into on or after the effective date of this section.

(D) When an existing agreement covered by subparagraph (A) is modified, renewed, or extended, or a new agreement is entered into, on or after the effective date of this section, the facility and the modified, renewed, or extended or a new agreement shall be subject to paragraphs (1) through (6), inclusive.

(E) The notification required by subparagraph (B) shall not be under penalty of perjury. Failure to comply with this subdivision or the filing of a false notification shall be subject to license suspension by the department.

(e) The Legislature finds and declares that it has granted exceptions subdivisions (f) to (h), inclusive, of Section 25503 to enable a licensee who is the sports facility owner, or the owner’s major tenant or agent or manager, to receive payment for the advertising of alcoholic beverage products within the facility where alcoholic beverages were sold, where the community public interest and welfare was deemed to benefit from that grant. Those exceptions are very few among the over 80,000 retail licensees in California, and any exception granted was limited to the express terms of the exception so as to not undermine the general prohibition. In furtherance of that policy, this section is enacted to clarify and reaffirm the laws generally prohibiting advertising payments to retail licensees, and is enacted to authorize manufacturers of alcoholic beverages to enter into agreements with the owner or major tenant of a sports entertainment facility for the paid placement of brand advertisements within the facility where the alcoholic beverage sales on the facility premises are conducted by a separate, independent entity who is the on-sale licensee and does not share in the advertising revenue.

SEC. 2.

 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) A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.

(C) An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.

(D) An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.

(E) An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.

(F) An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.

(G) An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.

(H) An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.

(I) A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.

(J) An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.

(K) An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed 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 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.

(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 subparagraph (O) of paragraph (1) of subdivision (a), the owner, a long-term tenant of the complex, or licensee of the complex, whether or not the owner, long-term tenant, or licensee holds an on-sale license.

(c) Any beer manufacturer or holder of a winegrower’s license, any 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.

(g) This section shall become inoperative on December 31, 2022.

SEC. 3.

 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.

(F) A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County. With respect to the arena described in this subparagraph, advertising space may also be purchased from, or on behalf of, a lessee or manager of the arena.

(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.

(F) In the case of a fully enclosed arena described in subparagraph (F) of paragraph (1) of subdivision (a), interior advertising in connection with events conducted within the arena.

(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.

(f) The provisions of subparagraph (F) of paragraph (1) of subdivision (a) and subparagraph (F) of paragraph (2) of subdivision (a) shall become inoperative on December 31, 2022. The amendments made to this section by Senate Bill 56 of the 2017–18 Regular Session shall become operative on January 1, 2023.

SECTION 1.Section 23792 of the Business and Professions Code is repealed.