BILL ANALYSIS Ó
AB 1320
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1320 (Allen)
As Amended June 11, 2012
Majority vote
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|ASSEMBLY: | |(June 2, 2011) |SENATE: |37-0 |(August 21, |
| | | | | |2012) |
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(vote not relevant)
Original Committee Reference: P.E.,R. & S.S.
SUMMARY : Adds a new Section to the Alcoholic Beverage Control
Act (Act) which authorizes the Department of Alcoholic Beverage
Control (ABC) to issue a maximum of 15 new original on-sale
general licenses, over a three-year period, for bona fide public
eating places in the County of Marin.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Authorizes ABC, to issue five new original on-sale general
licenses per year, until January 1, 2016, for bona fide public
eating places having a seating capacity for 50 or more diners
in a county of the 18th class. Also, provides that no more
than a total of 15 such licenses shall be issued relative to
this measure.
2)Requires ABC to follow existing "drawing for priority"
procedures with respect to the issuance of these new licenses
as set forth in Section 23961 of the Act.
3)Provides that a person who currently holds a valid on-sale
general license for seasonal business is not prohibited from
applying for an original on-sale general license pursuant to
this measure.
4)Makes it explicit that a license issued pursuant to this
measure shall not be transferred from one county to another
nor shall it be transferred to any premise not qualifying
under these provisions.
EXISTING LAW :
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1)The enactment of the 21st Amendment to the U.S. Constitution
in 1933 repealed the 18th Amendment and ended the era of
Prohibition. Accordingly, states were granted the authority
to establish alcoholic beverage laws and administrative
structures to regulate the sale and distribution of alcoholic
beverages.
2)Establishes ABC and grants it exclusive authority to
administer the provisions of the Act in accordance with laws
enacted by the Legislature. This involves licensing
individuals and businesses associated with the manufacture,
importation and sale of alcoholic beverages in this state and
the collection of license fees or occupation taxes for this
purpose.
3)Provides that ABC must deny an application for a license if
issuance would create a law enforcement problem, or if
issuance would result in, or add to, an undue concentration of
licenses in the area where the license is desired. For liquor
stores and other specified retail license, however, the ABC is
authorized to issue a license if the respective local
government determines that public convenience or necessity
would be served by granting the license.
4)Caps the number of new on and off-sale general licenses issued
by the ABC at one for every 2,500 inhabitants of the county
where the establishment is located (2,000:1 for on sale
licenses). If no licenses are available from the state due to
the population restrictions, those people interested in
obtaining a liquor license may purchase one from an existing
licensee, for whatever price the market bears. In 1994, the
Legislature approved a three-year moratorium on the issuance
of new off-sale beer and wine licenses, which at the time was
not bound by any population to license restriction. In 1997
this moratorium was made permanent.
5)Defines "bona fide public eating place" to mean a place which
is regularly and in a bona fide manner used and kept open for
the serving of meals to guests for compensation and which has
suitable kitchen facilities connected therewith, containing
conveniences for cooking an assortment of foods which may be
required for ordinary meals, the kitchen of which must be kept
in a sanitary condition with the proper amount of
refrigeration for keeping of food on said premises and must
comply with all the regulations of the local Department of
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Health.
6)Defines an "on-sale" license as authorizing the sale of all
types of alcoholic beverages: namely, beer, wine and distilled
spirits, for consumption on the premises (such as at a
restaurant or bar). An "off-sale" license authorizes the sale
of all types of alcoholic beverages for consumption off the
premises in original, sealed containers.
7)Provides for 58 counties and 58 "classes" of counties - one
county to each class based on their 1970 Census populations.
AS PASSED BY THE ASSEMBLY , this bill establishes, for each
employer within the California Public Employees' Retirement
System (CalPERS) and the twenty retirement systems established
under the County Employees Retirement Act of 1937 ('37 Act) a
Rate Stabilization Account (RSA) in the Employer Rate
Stabilization Fund (also established by this bill), for the
purpose of stabilizing employer retirement contributions.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : This bill was substantially amended in the Senate and
the Assembly-approved provisions of this bill were deleted.
Purpose of the bill : Under current law, the number of liquor
licenses issued in a given county is tied to the population of
that county which creates a problem for restaurants and hotels
that would like to cater to the large number of visitors in the
area but are unable to because they do not have a license to
serve alcohol. This measure is expected to lead to an increase
in full service restaurants in Marin County.
Background : As noted above, existing law provides for a
limitation on the number of new on-sale general licenses that
may be issued in a given year by ABC based on the population
growth of the county in which the licensed premises are located
(one license for every 2,000 residents). Thus, if a county
grows by 10,000 people in a given year ABC will sell five new
licenses in that county. A drawing is held by ABC if there are
more buyers than licenses available. The cost of an original
on-sale general eating place license (type 47) is $13,800.
Individuals seeking to open a full-service restaurant with a bar
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or cocktail menu who fail to obtain a liquor license through
this process typically must locate an existing licensed owner
willing to sell his/her license. Usually, that's done by
contacting a liquor license broker. The cost of obtaining a
license on the secondary market is driven by supply and demand
and potential sellers may ask for upwards of $150,000. Some of
these potential sellers view their license as tickets to a
richer retirement.
ABC's records from 2011 indicate that Marin County's population
was 254,692 and there were 136 on-sale general licenses in
existence within the county. Based on those statistics, no new
on-sale general licenses were made available in 2011. However,
ABC records indicate that one new on-sale general license was
made available and issued through the priority drawing process
in 2008 and another in 2009. According to ABC, currently there
are approximately 13,560 Type 47 licenses statewide. Licenses
are selling on the open market in Marin County for $75,000 to
$100,000.
Related legislation : AB 2560 (Allen) of 2012, was identical to
this bill. (Held in Assembly policy committee at author's
request.)
Prior legislation : AB 2266 (Evans), Chapter 130, Statutes of
2008, authorized ABC, commencing January 1, 2009, to issue five
additional new original on-sale licenses, per year for a period
of three years, for bona fide public eating places having a
seating capacity for 50 or more diners in Napa County.
(According to ABC staff, the department has issued 14 of the 15
new licenses in Napa County as authorized by AB 2266 of 2008 -
one license is still pending due to the fact that the
establishment is under construction.)
SB 762 (Cox), Chapter 193, Statutes of 2007, authorized ABC to
issue 10 new original on-sale general licenses for bona fide
public eating places in the County of Mono.
AB 1252 (Waters), Chapter 753, Statutes of 1978, permitted the
Director of ABC to authorize the conversion of any on-sale
general license for "seasonal business" to an on-sale general
license, as specified.
SB 1092 (Berryhill), Chapter 571, Statutes of 1975, authorized
ABC to issue five additional new original on-sale general
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licenses for bona fide public eating places (seating for 100 or
more diners) in any county where the inhabitants number less
than 5,000 but more than 3,000 (Mono County) according to the
1970 federal census and where the major economy of that county
is dependent upon the year-round use of that county's
recreational facilities.
SB 784 (Berryhill), Chapter 407, Statutes of 1975, authorized
ABC to issue three additional original off-sale general licenses
in a county of the 58th class (Alpine County).
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
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