BILL ANALYSIS Ó
AB 593
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Hall III, Isadore, Chair
AB 593 (Quirk) - As Amended: April 2, 2013
SUBJECT : Alcoholic beverages: Department of Alcoholic Beverage
Control.
SUMMARY : Makes various changes to the Alcoholic Beverage
Control Act (Act). Specifically, this bill :
1) Requires the Department of Alcoholic Beverage Control (ABC)
to evaluate its onsite license review process for restaurants in
order to implement a more expedited licensing process.
Requires ABC to prepare and submit a report to the Legislature,
on or before December 31, 2015, relating to the review.
2) The Act specifies that applicants for an on-sale or off-sale
license to have a notice of the application published in a
newspaper of general circulation, as described. This bill
would exempt an applicant from this requirement if they must
provide notice of their application by mail to every resident
and owner of real property within 500-foot radius of the
premises for which the license is to be issued or if ABC is
required to notice by mail a respective public agency, public
official, or governing body of a city or county.
3) Permits ABC to reject protests, except protests made by a
public agency, public official, or governing body of a city or
county, it determines are invalid or unreasonable, as described.
The bill would also require a protest submitted by a person
other than an employee of the department or a public officer to
be submitted by an individual and limit the protest to one
signatory.
4) Makes legislative findings that it is the intent of the
Legislature to enact legislation that would require the
Alcoholic Beverage Control Appeals Board to issue its decisions
within 120 days of a hearing.
5) Makes legislative findings that it is the intent of the
Legislature to enact legislation that would provide ABC with
recruitment and retention incentives.
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EXISTING LAW :
1) Establishes ABC and grants it exclusive authority to
administer the provisions of the Alcoholic Beverage Control Act
in accordance with the 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.
2) Provides that protests against the issuance of a liquor
license may be filed with ABC. Existing law permits ABC to
reject protests, except protests made by a public agency, public
official, or governing body of a city or county, it determines
to be false, vexatious, or without reasonable or probable cause.
3) Requires any hearings held on a protest, accusation, or
petition for a license to be held at specified locations and to
be conducted in accordance with specified administrative
procedures specified applicants for on-sale or off-sale
licensees to have a notice of the application published, as
provided.
4) Requires the ABC to notify the appropriate sheriff, chief of
police, district attorney, city or county planning agency, and
legislative body of an application for the issuance or transfer
of a liquor license, and prohibit the ABC from issuing or
transferring a license until at least 30 days after these
notices are provided. Existing law authorizes the ABC to extend
that 30-day period for a period not to exceed 20 days if a
proper written request is made by any local law enforcement
agency.
5) Restricts ABC from issuing an off-sale beer and wine license
if the applicant premise is located in a city or county where
the number of retail off-sale beer and wine licenses exceeds one
license for each 2,500 inhabitants. If the applicant premise is
located in a city and county, the ratio is one license for every
1,250 inhabitants. If no licenses are available due to the
population restrictions, anyone interested in obtaining a liquor
license must purchase one from an existing licensee.
6) Requires ABC to deny an application for a license if
issuance of the license would result in or add to an undue
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concentration of licenses in a particular area; unless the local
governing body finds that it would serve the public convenience
or necessity, as defined.
7) Provides ABC may revoke a license for a third violation of
selling to and consumption by a person under 21 years of age,
which occurs within any 36-month period. This provision shall
not be construed to limit the department's authority and
discretion to revoke a license prior to a third violation when
the circumstances warrant that penalty.
8) Provides for the suspension or revocation of an alcoholic
beverage license, when a licensee fails to take reasonable steps
to correct objectionable conditions on the licensed premises or
on any public sidewalk abutting a licensed premises, as
provided, after specified notice from the district attorney,
city attorney, or a county counsel. Specifies that a hearing
for a violation, as specified, shall be held within 60 days of
an accusation being filed.
FISCAL EFFECT : Unknown.
COMMENTS :
Background :
Alcohol oversight : ABC is vested with the exclusive authority
to license and regulate the manufacture, distribution and sale
of alcoholic beverages within California. ABC has the authority
to suspend, revoke or deny a license if it determines that
granting or continuance of the license would be contrary to
public welfare or morals. All ABC decisions may be appealed to
the ABC Appeals Board, a three-member body appointed by the
Governor, subject to Senate confirmation.
There are currently more than 70,000 alcoholic beverage licenses
throughout the state. This includes both "on-sale" and
"off-sale" establishments that sell beer and wine, and "on-sale"
and "off-sale" general licensees that also sell distilled
spirits. ABC is required to investigate both the applicant and
the premises for, which a license is applied, to determine if
the public would be adversely affected by the license issuance.
These investigations include an evaluation of the moral
character of the applicant and the suitability of the proposed
premises.
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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 licenses, however, 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.
State law caps the number of new "on and off-sale" general
licenses issued by 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."
Currently, there are restrictions on the issuance of licenses in
areas of undue concentration of retail licenses. ABC is
responsible for setting conditions for the safe operation of
these new licenses. Current law permits ABC to place reasonable
operating conditions upon retail licensees if grounds exist for
denial of a license. Operating conditions may cover any matter
relating to the conduct of the business or the condition of the
premises including, but not limited to, restrictions on hours of
sale, hiring of security guards, limitations on types and
strengths of beverages sold, and conduct of the licensee.
A protest can be made at any time within 30 days of any of the
following: 1) the first date of posting the premises with the
notice of intention to sell alcoholic beverages; 2) the first
date of posting the premises with the notice of application for
ownership change; and 3) the date of mailing the notice of
application to residents within 500 feet of the proposed
premises. If a valid protest is made to the issuance of a
license, usually a protest hearing will be held. In 2012, ABC
received 2,759 protest letters. From those letters, 414 license
applications were protested. If an application is protested, a
protested application can take a few months or longer to
complete.
If a retail license application has been protested and ABC has
recommended approval of the license, ABC may issue an Interim
Operating Permit upon the applicant's written request. If an
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application is withdrawn because of a protest being filed, an
applicant may not re-file an application at the same premises
for one year, and all protests remain valid for one year against
any subsequent applications filed by other persons at the
premises.
State v. local control of alcohol policy : Over the years, local
governments have often petitioned the Legislature for greater
authority to directly regulate establishments that sell alcohol
(e.g., restricting the hours of operation of problem premises,
or limiting the sale of certain products such as fortified wines
or high alcohol content malt beverages). Much of this activity
has been centered on local government's use of zoning laws and
conditional use permits that place operating conditions on new
businesses that sell alcohol. While current law prohibits ABC
from issuing a new license in an area not locally zoned for that
type of business activity, those establishments in existence
prior to any local zoning action are "grandfathered" and
therefore beyond the reach of the local government, a source of
contention for local governments.
Historically, the alcohol industry and retailers have opposed
ceding to local government any measure of the state's exclusive
authority to regulate alcohol. The industry has advocated that
matters relating to the regulation of alcohol should be
determined at the state level, as opposed to an
assortment of local regulations, which may vary from local
jurisdiction to local jurisdiction.
Purpose of AB 593 : According to the author's office, when
businesses seek to revitalize our economy by opening new
locations in our communities, they can become overwhelmed by the
volume of our regulation process. Among the more significant
delays (most notably in the case of California's prominent
restaurant industry) is the ABC license review process. A new
business must hire employees, secure financing, and meet
building code ordinances to name just a few. It is in
California's interest to ensure that our ABC license review
process is at its maximum level of efficiency - giving
expeditious decisions while retaining the needed oversight and
public input.
The author's office states that the goal of this bill is to give
ABC more discretion to prioritize their efforts while allowing
applicants to participate in a process that is as efficient as
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possible.
The bill will require all public protests to be submitted
individually and limited to one signee. The author maintains
that this will assist the ABC in meeting their obligation to
contact protesters directly as opposed to those cases where only
a list of names on a petition is available.
In addition, the measure eliminates a requirement for applicants
to publish notification in regional print media in those cases
where individual notifications are already being mailed directly
to area residents.
The bill defines what constitutes an "invalid or unreasonable"
protest to an ABC license application. The author believes that
the list shall include common examples to be determined by the
ABC. Providing clarity to which type of protests will be
considered valid seeks to reduce the workload of the ABC in
having to respond to numerous unreasonable protests.
The measure establishes that it is the intent of the Legislature
to require the ABC Appeals Board to issue a decision not in
excess of 120 days. The author states, that all other stages of
a license review provides a clear deadline except the Appeals
Board decision and this seeks to provide further assurance on
timing.
Lastly, the bill states that it is the intent of the Legislature
to provide the ABC with recruitment and retention incentives.
The author states, that regular turnover of ABC staff may
contribute to a delay in application reviews and this bill seeks
to help maintain an experienced workforce.
Prior legislation : SB 825 (Committee on Governmental
Organization), Chapter 68, Statutes of 2009. Made clarifying
and conforming changes to an existing provision of law
pertaining to notification requirements and the submission of
protests to ABC regarding an application for an alcohol license.
SB 415 (Oropeza), 2009-2010 Session, Vetoed by Governor. This
bill would have expanded the eligibility list of local
government officials who may request an extension of time to
review the issuance of transfer of an alcoholic beverage license
and lengthens the existing extension period from 20 to 30 days.
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AB 2893 ( Hancock), Chapter 253, Statutes of 2008. The bill
granted ABC the authority to impose restrictions on retail
license transfers in instances where the license transferor has
been cited for multiple violations of the Alcoholic Beverage
Control Act during his/her ownership of the license.
SB 148 (Scott) Chapter 625, Statutes of 2006. Among other
things, provided additional bases for the suspension or
revocation of an ABC license, when a licensee fails to take
reasonable steps to correct objectionable conditions on the
licensed premises or on any public sidewalk abutting a licensed
premises, as provided, after specified notice from the district
attorney, the city attorney, or a county counsel.
AB 2296 (Leno), Chapter 345, Statutes of 2004. Permits ABC to
reject protests it determines to be frivolous. Provide for a
hearing upon the request of any of these protesting parties who
have filed a timely verified protest in a timely fashion
pursuant to existing law. In addition, provides that a protest
is deemed withdrawn if the person requesting the hearing fails
to appear at that hearing.
AB 624 (Oropeza) Chapter 931, Statutes of 2001. Among other
things, permitted ABC to take into account neighboring crime
statistics in the area of the site of the establishment when
transferring a license. Also, extended the time period local
entities have to respond to the notice of a new or
transferred license and required the notification of local
property owners adjacent to the site.
AB 1092 (Lowenthal), Chapter 499, Statutes of 1999, authorizes
ABC to place reasonable restrictions upon retail licenses or any
licensee in the exercise of retail privileges if ABC adopts
conditions requested by a local governing body.
REGISTERED SUPPORT / OPPOSITION :
Support
California Restaurant Association
National Federation of Independent Business
Opposition
California Council on Alcohol Problems
AB 593
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Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531