BILL ANALYSIS Ó
AB 461
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ASSEMBLY THIRD READING
AB 461 (Achadjian)
As Amended May 1, 2013
Majority vote
GOVERNMENTAL ORGANIZATION 17-0 APPROPRIATIONS 17-0
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|Ayes:|Hall, Nestande, Bigelow, |Ayes:|Gatto, Harkey, Bigelow, |
| |Chesbro, Cooley, Gray, | |Bocanegra, Bradford, Ian |
| |Hagman, | |Calderon, Campos, |
| |Roger Hernández, Jones, | |Donnelly, Eggman, Gomez, |
| |Jones-Sawyer, Levine, | |Hall, Ammiano, Linder, |
| |Medina, Perea, V. Manuel | |Pan, Quirk, Wagner, Weber |
| |Pérez, Salas, Torres, | | |
| |Waldron | | |
| | | | |
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SUMMARY : Authorizes the Department of Alcoholic Beverage
Control (ABC) to issue five new original on-sale general
licenses to San Luis Obispo County between January 1, 2014, and
December 31, 2016, for restaurants with a seating capacity for
50 or more diners. Specifically, this bill :
1)Provides that in a county of the 24th class (San Luis Obispo
County), ABC may issue a total of five additional new original
on-sale general licenses for bona fide public eating places,
until January 1, 2017.
2)Specifies to qualify for a license under this bill, the
premises upon which a bona fide public eating place is
operated shall have a seating capacity for 50 or more diners.
3)Requires ABC to follow existing "drawing for priority"
procedures with respect to the issuance of these new licenses
as set forth in Business and Professions Code Section 23961 of
the Alcohol Beverage Control Act (Act).
4)Provides that current law does not prohibit a person who
currently holds a valid on-sale general license for seasonal
business from applying for an original on-sale general
license, as defined.
5)Provides that a license issued under this bill shall not be
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transferred from one county to another nor shall it be
transferred to any premises not qualifying under this new
statute.
EXISTING LAW :
1)Grants states the authority, with the enactment of the 21st
Amendment to the U.S. Constitution in 1933 repealing the 18th
Amendment and ending the era of Prohibition, 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
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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
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)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 Marin County. Provides that no more than a total of 15
such licenses shall be issued relative to this statute.
8)Authorizes the 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. Provides that no more than a total of 15 such
licenses shall be issued relative to this statute.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, any additional licensing and oversight costs for ABC
associated with this legislation will be minor and absorbable.
COMMENTS :
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 or her license. Usually, that is 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 San Luis Obispo County's
population was 270,966 and 271,483 in 2012 there were 126
on-sale general licenses in existence within the county. Based
on those statistics, no new on-sale general licenses were made
available in 2011or 2012. 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.
Purpose of the bill : In 2012, ABC issued additional liquor
licenses to counties with satisfactory population growth
verified by the Department of Finance (DOF). San Luis Obispo
County (County) was not eligible for additional liquor licenses
based on the set criteria.
According to the author, while the County could not show
satisfactory proof of population growth, the number of
businesses unable to obtain a license each year demonstrates the
County's need for additional liquor licenses.
The author's office states, located between Los Angeles and San
Francisco, San Luis Obispo County is comprised of communities
scattered along the beaches and mountains of the Central Coast.
With such a diverse geography, many tourists make their way to
the County for its various attractions. In conjunction with the
growing wine and tourism industry, San Luis Obispo County has a
flourishing restaurant scene, which requires the additional
liquor licenses.
The author states, although the distribution of liquor licenses
across the San Luis Obispo County reflect the population, ABC
does not take into account the many tourists who visit the
County each year, making it even more difficult for
entrepreneurs to succeed in a volatile economic climate. This
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bill will provide San Luis Obispo County with additional liquor
licenses to accommodate the growing tourism industry that
accounts for a significant portion of the local economy.
Prior legislation : AB 1320 (Allen), Chapter 467, Statutes of
2012. Authorized 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 Marin County.
AB 2266 (Evans), Chapter 130, Statutes of 2008. Authorized 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
Napa County.
SB 762 (Cox), Chapter 193, Statutes of 2007. Allowed ABC to
issue 10 new original on-sale general licenses for bona fide
public eating places in Mono County.
AB 1252 (Waters), Chapter 753, Statutes of 1978. Permitted 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
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
FN:
0000656
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