California Assembly Bill AB1798 Amended / Bill

 BILL NUMBER: AB 1798AMENDED BILL TEXT AMENDED IN ASSEMBLY APRIL 5, 2010 INTRODUCED BY Assembly Member Evans FEBRUARY 10, 2010  An act to amend Section 25237 of the Business and Professions Code, relating to alcoholic beverage control.   An act to amend Sections 23086 and 25503.15 of the Business and Professions Code, relating to alcoholic beverag   es.  LEGISLATIVE COUNSEL'S DIGEST AB 1798, as amended, Evans. Alcoholic beverages:  wine labeling.   Alcoholic Beverage Control Appeals Board: tied-house restrictions.   (1) Existing law requires the Alcoholic Beverage Control Appeals Board to issue an order within 60 days after an appeal is filed.   This bill would require the board to issue an order within 75 days after an appeal is filed.   (2) Existing provisions of the Alcoholic Beverage Control Act, known as "tied-house" restrictions, generally prohibit a winegrower from having an ownership interest in an on-sale alcoholic beverage license, with limited exceptions. Among other exemptions, existing law exempts from the tied-house restrictions any licensed winegrower who meets specified conditions, including that the winegrower, or his or her officer, director, or agent, enters into an undertaking, approved by the Department of Alcoholic Beverage Control, that makes specified statements regarding the sale or furnishing of wine by the winegrower, or any officer, director, or agent of the winegrower.   This bill would retain the requirement that the winegrower, or the officer, director, or agent of the winegrower meet the specified conditions regarding the sale or furnishing of wine under the circumstances described above, but would eliminate the requirement that statements describing these conditions be made pursuant to an undertaking approved by the department.   Existing law makes it unlawful to make any representation that a wine is produced entirely from grapes grown in specified counties unless the representation is true. Existing law specifies that those provisions apply to representations made on labels, advertising matter, letterheads, invoices, tags, signs, business cards, and all other representations of any kind whether oral, written, or printed.   This bill would make a technical, nonsubstantive changes in those provisions.  Vote: majority. Appropriation: no. Fiscal committee:  no   yes  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 23086 of the   Business and Professions Code   is amended to read:  23086. In all cases, the board shall enter its order within  60   75  days after the filing of an appeal.  SEC. 2.  Section 25503.15 of the   Business and Professions Code   is amended to read:  25503.15. (a) Notwithstanding any other provision of this division, a winegrower who manufactures, produces, bottles, processes, imports, or sells wine only, or any officer, director, or agent of that person, may hold the ownership of any interest in any on-sale license,  or the business conducted under that license, provided that the person or the officer, director, or agent of that person, shall have entered into an undertaking approved by the department stating both of the following   if both of the following conditions are met  : (1)  That neither   Neither    that person nor any officer, director, or agent of that person  shall sell or furnish   sells or furnishes  to the holder of the license any wine, or  permit  permits  the sale pursuant to that license of any wine, manufactured, produced, wholesaled, bottled, processed, imported, or sold by that person or that person's principal for as long as that ownership continues. (2)  That neither  Neither  that person nor any officer, director, or agent of that person  shall enter   enters  into any collusive scheme whereby he or she unfairly sells or promotes, in his or her on-sale businesses, the wine of another winegrower who manufactures, produces, bottles, processes, imports, or sells wine only, in return for his or her wine being unfairly sold or promoted in the on-sale businesses of that winegrower. (b) Notwithstanding any other provision of this division, any licensed winegrower or any winegrower who has a wholesale license, or any officer, director, or agent of that person, may hold, directly or indirectly, the ownership of any interest in an on-sale license, provided that each of the following conditions is met: (1) The on-sale licensed premises are licensed as a bona fide public eating place as defined in Section 23038, or as a bona fide bed and breakfast inn as defined in Section 24045.11. (2) The on-sale licensed premises purchases all alcoholic beverages sold and served at the on-sale licensed premises only from California wholesale licensees, other than the licensed winegrower who has a wholesale license and an interest in an on-sale license, unless one of the following conditions is met: (A) The wine purchased is produced or bottled by, or produced and packaged for, the same licensed winegrower that holds an interest in the on-sale license. (B) The wine is produced or bottled by, and is purchased from, a licensed winegrower who sells no more than 125,000 gallons of wine per year for distribution in this state under all brands or trade names owned by that winegrower. (C) The wine is purchased by an on-sale licensee in whose on-sale license a licensed winegrower holds an interest, provided that the winegrower sells no more than 125,000 gallons of wine per year for distribution in this state under all brands or trade names owned by that winegrower. (3) The licensed winegrower and any officer, director, or agent of that person, whether individually or in the aggregate, do not sell and serve the wine products produced or bottled under any brand or trade name owned by that winegrower through more than two on-sale licensed premises in which any of them holds an ownership interest. (4) The number of wine items by brand offered for sale by the on-sale licensed premises that are produced, bottled, processed, imported, or sold by the licensed winegrower or by any person holding any interest in the winegrower does not exceed 15 percent of the total wine items by brand listed and offered for sale in the licensed bona fide public eating place selling and serving that wine. This paragraph does not apply to a bona fide bed and breakfast inn. (c) 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 exceptions established by this section to the general prohibition against tied interests must be limited to their express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.  SECTION 1.   Section 25237 of the Business and Professions Code is amended to read: 25237. It is unlawful to make any representation that a wine is produced entirely from grapes grown in the counties mentioned in Section 25236 unless the representation is true. This section shall apply to representations made on labels, advertising matter, letterheads, invoices, tags, signs, business cards, and all other representations of any kind that are oral, written, or printed.