BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 593 (Quirk) - Department of Alcoholic Beverage Control
Amended: May 24, 2013 Policy Vote: GO 10-0
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Maureen Ortiz
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 593 requires the Department of Alcoholic
Beverage Control (ABC) to evaluate its onsite license review
process for restaurants that are bona fide eating places in
order to implement a more expedited licensing process, and
report to the Legislature by December 31, 2015. The bill also
will permit the department to reject protests that it determines
are invalid or unreasonable.
Fiscal Impact:
One-time costs to the ABC of up to $120,000 for rule making
relating to unreasonable protests, potentially offset by
future workload reductions
(Special Fund).
According to the department, the required evaluation regarding
the onsite license review process for restaurants is already
included in its annual report to the Legislature, therefore, the
ABC will not incur any additional costs due to that provision in
AB 593.
Background: The ABC is vested with the exclusive authority to
license and regulate the manufacture, distribution and sale of
alcoholic beverages within California and has the authority to
suspend, revoke or deny a license if it determines that the
granting or continuance of the license would be contrary to
public welfare or morals. All of the ABC decisions may be
appealed to the ABC Appeals Board, a three-member body appointed
by the Governor.
Currently there are approximately 80,000 alcoholic beverage
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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 licenses that also sell distilled
spirits. The ABC is required to investigate both the applicant
and the premises for which a license is applied in order to
determine if the public would be adversely affected by the
issuance of the license. These investigations include an
evaluation of the moral character of the applicant and the
suitability of the proposed premises.
Currently, there are restrictions on the issuance of licenses in
areas of undue concentration of retail licenses. The 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 the conduct of the licensee.
A protest can be made at any time within 30 days of any of the
following: (a) the first date of posting the premises with the
notice of intention to sell alcoholic beverages;
(b) the first date of posting the premises with the notice of
application for ownership change; and, (c) 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. Protested applications
generally take a few months or longer to review and process.
The ABC may reject protests, except protests made by a public
agency or public official or protests made by the governing body
of a city or county, if it determines the protests are false,
vexatious, frivolous, or without reasonable or probable cause at
any time prior to a hearing.
Proposed Law: AB 593 makes the following substantive
modifications to the Alcoholic Beverage Control Act:
1) Requires the ABC to evaluate its onsite license review
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process for restaurants that are bona fide eating places in
order to implement a more expedited licensing process. Also,
requires ABC to prepare and submit a one-time report to the
Legislature, due on or before 12/31/2015, relative to the
license review process.
2) Exempts an applicant for an on-sale or off-sale license
from an existing requirement to publish a notice of the
application in a newspaper of general circulation in the city in
which the premises are situated if they are also required to
provide specified notices via mail of application for licenses,
including retail licenses and transfers of licenses.
3) Permits the ABC to reject license protests it determines the
protest to be "invalid or unreasonable." Also, provides that
"invalid or unreasonable" protests include, but are not limited
to, examples determined, and made available to the public, by
the ABC in a manner the ABC deems appropriate for the protest
process.
4) Requires that a protest submitted by a person other than an
employee of the ABC or a public officer must be submitted by an
individual, rather than by a petition signed by multiple
individuals.
Staff Comments: The goal of AB 593 is to give the ABC more
discretion to prioritize its efforts while allowing applicants
to participate in a process that is as efficient as possible.
AB 593 allows the ABC to define what constitutes an invalid or
unreasonable protest with respect to a license application. By
providing clarity as to which type of protests will be
considered valid, the author seeks to reduce the workload of the
ABC by giving it discretion to not respond to "unreasonable"
protests.
Additionally, AB 593 requires all public protests to be
submitted individually and limited to one signee in order to
assist the ABC in meeting its obligation to contact protesters
directly, as opposed to those cases where only a list of names
on a petition is available.
Lastly, AB 593 eliminates a requirement for applicants to
publish notification in regional print media in those cases
where individual notifications are already being mailed directly
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to area residents. This is intended to help simplify the
application process for certain applicants who currently have
multiple notification requirements.