BILL ANALYSIS Ó
Bill No: AB
525
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 525 Author: Ting
As Amended: June 17, 2013
Hearing Date: June 25, 2013
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages: licenses: theaters
DESCRIPTION
AB 525 creates a new special on-sale general license in the
Alcoholic Beverage Control (ABC) Act that enables the
operator of any for-profit theater, as specified, to serve
alcoholic beverages during certain hours in specified areas
of the theater. Specifically, this measure:
1)Authorizes the Department of ABC to issue a special
on-sale general license to the operator of any for-profit
theater, configured with theatrical seating of at least
1,000 seats and primarily devoted to live theatrical
performances, located within the City and County of San
Francisco.
2)Stipulates that the special on-sale general license shall
permit sales, service, and consumption of alcoholic
beverages in the lobbies and seating areas of the theater
for the period beginning two consecutive hours prior to a
live theatrical performance and ending one hour after the
performance is completed.
3)Makes it explicit that any special on-sale general
license issued shall be subject to the limitations
provided in existing law that caps the number of new
on-sale general licenses issued by the ABC at one for
every 2,000 inhabitants of the county where the
establishment is located. Also, provides that the
license issued does not mandate that the premises be
AB 525 (Ting) continued
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operated as a bona fide public eating place.
4)Stipulates that the theater shall not be subject to an
existing provision of the ABC Act (B&P Code Section
23793) that prohibits the transferring of a license
unless the applicant can show that substantial public
demand cannot otherwise be satisfied.
5)Makes it explicit that a special on-sale general license
provided for in this measure is not to be issued until
any existing licenses issued by the ABC for the premises
of the for-profit theater are cancelled.
6)Specifies that a "for-profit theater" shall not include
an adult or sexually oriented business, as defined in
Section 318.5 of the Penal Code.
EXISTING LAW
Existing law establishes the Department of ABC and grants
it exclusive authority to administer the provisions of the
ABC 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.
Existing law establishes various alcoholic beverage license
categories and a schedule of annual fees charged to the
licensees.
Existing law authorizes the ABC to issue a special on-sale
general license to any nonprofit theater company - a
theater company holding such a license may sell and serve
alcoholic beverages to ticket holders only during, and two
hours prior to and one hour after, a bona fide theater
performance of the company.
Existing law 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 3-year moratorium on the issuance of new
AB 525 (Ting) continued
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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.
Existing law defines "public premises" as a 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
ABC. No person under 21 years of age is allowed on public
premises. Furthermore, the law provides that "public
premises" does not include 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; nor does it include historic units of the state park
system, premises being operated under a temporary on-sale
license, as specified, or on-sale beer licensed stadia,
auditoria, fairgrounds, or racetracks; nor does it include
non-profit theater companies licensed, as specified; nor
does it include winegrowers' premises.
Existing law 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 Health.
Existing law 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.
The ABC Act provides that a violation of any of its
provisions for which another penalty or punishment is not
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specifically provided is a misdemeanor.
Existing law, Section 318.5 of the Penal Code, defines
"adult or sexually oriented business" to include any
establishment that regularly features live performances
which are distinguished or characterized by an emphasis on
the exposure of the genitals or buttocks of any person, or
the breasts of any female person, or specified sexual
activities that involve the exposure of the genitals or
buttocks of any person, or the breasts of any female
person.
BACKGROUND
Purpose of AB 525: The author's office states that this
measure is intended to create a new on-sale general
alcoholic beverage license category that can accommodate
the business goals of an operator of any for-profit theater
located in the City and County of San Francisco.
This measure has been introduced in behalf of Shorenstein,
Hays, Nederlander Company (SHN) which owns and operates the
Curran, Golden Gate, and Orpheum Theatres in San Francisco.
SHN has evolved from its inception in 1977, as a promoter
of short engagements of national tours in one theatre, to
become the pre-eminent theatrical entertainment company in
San Francisco presenting a year round season of plays and
musicals. SHN has offered a Broadway series including
musicals and plays featuring world premieres, pre-Broadway
engagements, limited West Coast-only runs of productions
starring the original Broadway casts and national tours
(e.g., Wicked, Jersey Boys, the Lion King, Les Misérables,
and the Phantom of the Opera).
The three theaters are operated as for-profit theaters and
currently hold Type 48 licenses (on-sale general for public
premises) which are meant for over 21-only bars. Such a
license enables each theater to serve beer, wine, and
distilled spirits to patrons. However, under the current
license type, patrons must consume their drinks in a
segregated, partitioned-off space and are precluded from
taking their beverages into the lobby or seating area of
the performance. SHN points out that due to its unique set
of circumstances, as a for-profit theatre not operating in
a civic auditorium, they are unable to qualify for another
license type that would rectify the situation.
AB 525 (Ting) continued
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According to SHN, this measure would address the
above-stated problem in current law that prevents their
patrons from easily approaching service bars to purchase
alcoholic and non-alcoholic beverages and carrying those
drinks elsewhere in the lobby or to their seats. SHN
emphasizes that this is extremely problematic in their
historically renovated theaters that have limited lobby
space and that AB 525 would solve the problem by allowing
the issuance of a special on-sale general license that
would permit sales, service, and consumption of alcoholic
beverages in the lobbies and seating areas of the theater
at specified times. Additionally, SHN notes that AB 525
contains several provisions that ensure appropriate license
controls are in place.
Arguments in Support : Proponents claim that there is
little distinction between a sporting arena with minors
present and a theater except for the presence of limited
food items. Proponents also contend that AB 525 is a
narrowly crafted bill that will enhance the experience of
theatergoers at many of San Francisco's grand historically
renovated theaters. Additionally, proponents emphasize
that this measure contains several provisions that ensure
appropriate license controls are in place.
Arguments in Opposition: Opponents have expressed concern
about expanding the current exemption banning on-sale
alcohol in public premises to "for-profit" theaters.
Opponents argue that theaters are frequented by children as
well as adults and children should not be exposed to yet
another public venue where adults may consume alcohol.
Additionally, opponents contend that this measure would be
a slap in the face to non-profit theaters in San Francisco
which have a difficult time making it financially and will
lose a slight competitive advantage of alcohol sales.
PRIOR/RELATED LEGISLATION
SB 1531 (Wolk), Chapter 334, Statutes of 2012. Created a
narrow tied-house exception, until January 1, 2018,
enabling the Napa Valley Opera House to accept wine and
monetary donations from wineries located within the
Counties of Napa, Sonoma, Lake, and Mendocino.
AB 2793 (Governmental Organization Committee), Chapter 273,
AB 525 (Ting) continued
Page 6
Statutes of 2010. Among other things, authorized a
licensed winegrower to serve on the board of trustees of a
nonprofit theater company operating a theater in the City
of Livermore, as specified. Also, authorized ABC to issue
a club license to nonprofit lawn bowling clubs that do not
discriminate or restrict membership, as specified.
SB 131 (Wiggins), Chapter 638, Statutes of 2009. Created
an exception to the ABC Act, until December 31, 2014,
authorizing the San Francisco Symphony, which holds an
on-sales liquor license, to accept monetary and alcoholic
beverage product contributions (for free) from licensed
alcoholic beverage manufacturers.
AB 23 (Ma), Chapter 23, Statutes of 2008. Allowed those
licensees operating a cabaret theater to admit persons
under 21 years of age to theater performances at any time,
provided that alcoholic beverages are not sold, served, or
consumed on the premises during those performances.
AB 1429 (Governmental Organization), Chapter 567, Statutes
of 2001. Among other things, deleted the requirement that
a nonprofit theater company must be in existence for at
least ten years in order for ABC to issue a special on-sale
general license.
SUPPORT: As of June 21, 2013:
Family Winemakers of California
Mayor Edwin M. Lee of the City and County of San Francisco
Market Street Association
San Francisco Chamber of Commerce
Shorenstein, Hays, Nederlander Company
OPPOSE: As of June 21, 2013:
Alcohol Justice
California Council on Alcohol Problems
FISCAL COMMITTEE: Senate Appropriations Committee
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