BILL ANALYSIS Ó
AB 2082
Page 1
ASSEMBLY THIRD READING
AB
2082 (Campos)
As Amended May 23, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+---------------------|
|Governmental |13-4 |Gray, Alejo, Bonta, |Bigelow, Linder, |
|Organization | |Campos, Cooley, |Maienschein, |
| | |Cooper, |Steinorth |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Eduardo Garcia, | |
| | |Gipson, Jones-Sawyer, | |
| | |Levine, Salas, | |
| | |Waldron | |
| | | | |
|----------------+-----+----------------------+---------------------|
|Appropriations |15-5 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Daly, |Wagner |
| | |Eggman, Gallagher, | |
| | |Eduardo Garcia, | |
| | |McCarty, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
AB 2082
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SUMMARY: Provides the Director of the Alcoholic Beverage
Control (ABC) may, by emergency order, temporarily suspend,
limit, or condition, any license when, in the opinion of the
department, the action is urgent and necessary to protect
against an immediate threat to health or safety that is
reasonably related to the operation of the licensed business.
This bill would, among other things related to the issuance and
application of an emergency order, a licensee may petition for
relief from the order by written argument, as specified.
Specifically, this bill:
1)States that the Director may temporarily suspend, limit, or
condition any license issued, as specified, by emergency order
prior to any hearing when, in the opinion of ABC, the action
is urgent and necessary to protect against an immediate threat
to health or safety that is reasonably related to the
operation of the licensed business.
2)Provides the emergency order shall set forth the grounds upon
which it is based, including a statement of facts constituting
the alleged emergency necessitating the action.
3)Provides if an immediate threat to health or safety is
alleged, direct evidence of the threat must be presented to
the director prior to the issuance of an emergency order. The
standard in any subsequent evidentiary hearing shall be
whether the licensee knew, or should have known, about the
threat.
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4)States "direct evidence" includes, but is not limited to,
police reports, citations from the relevant local civil
authority, photographs, and video footage provided by law
enforcement or another public official acting in his or her
capacity.
5)States "immediate threat to health or safety" means the
trafficking or dealing of controlled substances, prostitution,
human trafficking, gambling, or violence involving great
bodily injury or death occurs on or immediately adjacent to
the licensee's premises.
6)States the emergency order shall be effective immediately upon
issuance and service upon the licensee or any agent of the
licensee. ABC shall serve the licensee with the emergency
order, a copy of available discovery, and other relevant
evidence in possession of the department, including, but not
limited to, affidavits, declarations, and any other direct
evidence upon which the ABC relied in issuing the emergency
order. ABC shall notify the licensee of the licensee's right
to petition for relief.
7)Provides that once the emergency order has been served, a
licensee may petition for relief from the order by written
argument.
8)States if a petition for relief is filed, using a
preponderance of the evidence standard; the director shall
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modify or vacate the emergency order if either:
a) There is a reasonable probability that the licensee will
prevail in the accusation.
b) The likelihood of immediate threat to the health or
safety in not sustaining the emergency order does not
outweigh the likelihood of injury to the licensee in
sustaining the emergency order.
c) ABC shall respond, in writing, to a petition for relief,
by either sustaining, modifying, or vacating the emergency
order, within three business days of receipt of the
petition. If ABC does not sustain or modify the emergency
order within three business days of receipt of the
petition, the emergency order shall be dissolved.
d) The emergency order shall remain effective until further
order of the ABC or disposition at an accusation
proceeding.
e) ABC shall file an accusation against the licensee with
any additional, available pertinent discovery that was not
provided to the licensee at the time the emergency order
was issued within five business days after the issuance of
an emergency order. The emergency order shall be dissolved
if ABC does not file an accusation within five business
days after the issuance of the order.
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f) The licensee is entitled to a hearing. If a hearing is
requested, it shall commence within 10 business days after
ABC's receipt of the Notice of Defense.
g) A licensee is not precluded from proceeding directly to
a full evidentiary hearing on an accusation without first
petitioning ABC for relief.
h) At the accusation hearing, the administrative law judge
(ALJ) shall issue a verbal decision that sustains or
vacates the emergency order or shall issue a written order
sustaining or vacating the emergency order within 24 hours
of the close of the hearing. The ALJ shall submit a
written proposed decision within 10 days after close of the
hearing.
EXISTING LAW:
1)States ABC has the exclusive power, in accordance with laws
enacted, to license and regulate the manufacture, importation
and sale of alcoholic beverages in this State. It also has
the power for good cause to deny, suspend or revoke any
specific alcoholic beverage license. (California Constitution
Article XX, Section 22)
2)Provides ABC is headed by a Director, whose function is to
supervise the manufacture, distribution and sale of alcoholic
beverages in such a number as to fulfill the public policy and
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legislative purpose of the ABC Act.
3)Authorizes ABC to investigate potential violations of the ABC
Act. Authorizes the Director of the department to bring an
action to enjoin a violation or the threatened violation of
the act, and provides for a hearing process held on a protest,
accusation, or petition for a license.
4)Provides that the ABC may place reasonable conditions upon any
licensee in certain situations, including, but not limited to,
the following: where grounds exist for the denial of an
application for a license or where a protest against the
issuance of a license has been filed; where findings are made
by the ABC which would justify suspension or revocation of the
license, and imposition of the conditions is reasonably
related to those findings; where findings are made by the ABC
that the licensee has failed to correct objectionable
conditions within a reasonable period of time. Provides
further that the ABC may suspend or revoke a license for
failure to take reasonable steps to correct objectionable
conditions, as described. (Business and Professions (B&P)
Code Sections 23800, 24200, and 24200.1.)
5)Authorizes ABC, in its discretion, to suspend or revoke any
license to sell alcoholic beverages if it shall determine for
good cause that the continuance of such license would be
contrary to the public welfare or morals. ABC may use a range
of progressive and proportional penalties. This range will
typically extend from Letters of Warning to Revocation.
Higher or lower penalties may be recommended based on the
facts of individual cases where generally supported by
aggravating or mitigating circumstances.
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6)Provides if an accusation is filed against a licensee, the
licensee is entitled to have a public hearing on the
accusation to present a defense against the charges made. The
hearing will be presided over by an Administrative Law Judge
of the Administrative Hearing Office. At the hearing, the
licensee is entitled to the issuance of subpoenas to compel
the attendance of witnesses and materials and may be
represented by counsel (but not at public expense), may
present relevant evidence and may cross-examine all witnesses.
The Administrative Law Judge makes a proposed decision, which
is filed with the ABC Director. (Government Code Sections
11500 to 11528)
7)Provides generally that the ABC shall deny an application for
a license if the issuance or transfer of the license would
tend to create a law enforcement problem or add to undue
concentration of licenses, unless issuing the license would
serve a public convenience or necessity. Defines "undue
concentration" in terms of a specified ratio of licensed
premises-to-population within a census tract or a
crime-reporting district in which the reported crime rate
exceeds the crime rate of the entire local law enforcement
jurisdiction by more than 20%. (B&P Code Sections 23958 and
23958.4.)
8)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.
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9)States the California Gambling Control Commission may issue
any emergency orders against an owner licensee or any person
involved in a transaction requiring prior approval that the
division deems reasonably necessary for the immediate
preservation of the public peace, health, safety, or general
welfare, as specified.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, minor and absorbable costs to ABC. The new authority
granted to ABC would be used in extreme cases and would conform
to ABC's existing operations.
COMMENTS:
Purpose of the bill: The author's office notes this bill would
provide the Director of ABC with the authority to suspend a
business' alcohol license in the case of an emergency that
threatens the health and safety of the public. To do so, the
Director must produce an emergency order with a statement of
facts containing the alleged emergency, any relevant evidence
upon which ABC relied in issuing the emergency order, and a
notice of the licensee's right to petition for relief.
The author states this bill also allows the licensee to petition
for relief from the order by written argument, to which ABC must
respond within three business days with a document sustaining,
modifying, or vacating the emergency order. If the licensee or
entity against who the emergency order has been issued requests
a hearing, it will be granted within 10 business days after
ABC's receipt of the Notice of Defense.
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The author points out "In San Jose, we have seen many cases of
violent crime and murder in relation to bars that double as
'bikini bars' or strip clubs. The illegal operations in these
bars may go unpunished for weeks or even months, while the
police department and local ABC officials build a case against
them. Even under urgent situations, like repeated violent
crimes happening, local officials have their hands tied and must
let the businesses continue operation. Even worse, many times
these establishments are run by the same group of business
partners/family members who merely transfer the alcohol license
amongst each other when the business is finally shut down. The
author notes that the San Jose Police Department has had success
in dealing with and shutting down these establishments, but
their authority is still lacking."
The author believes this bill will be a tool that can be used,
with caution, when residents face dangerous circumstances
because of problem businesses. This bill was drafted in close
collaboration with local and statewide ABC officials, as well as
San Jose Police Department officials. Currently, the San Jose
Chief of Police can immediately suspend an entertainment license
of a business in the case of an emergency, but this practice is
only applicable within the city's "entertainment zone." Law
enforcement and ABC have their hands tied when the same
emergencies happen anywhere outside that zone. This bill also
takes into consideration the current abilities of the Department
of Consumer Affairs, the Department of Public Health and the
Bureau of Gambling Control (see 9) in Existing Law) as examples
of how to craft the ability to suspend licenses in cases of
emergencies, while ensuring that licensees have necessary
protections and the right to due process.
Background:
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State v. Local Control of Alcohol Policy: Much to local
government's frustration, both the state Constitution and the
ABC Act generally prohibit local governments from regulating the
sale of alcoholic beverages within their jurisdictions.
Exacerbating this sentiment is the perception that ABC is
under-funded and understaffed with less than 200 enforcement
agents available to police the almost 70,000 retail licenses in
the state. Further compounding this situation is the inability
of ABC to receive any funding increases. The ABC is a special
fund department that receives funding from fees imposed upon
alcoholic beverage licensees.
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 the 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
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local jurisdiction.
Disorderly house law: A disorderly house is a licensed premises
that disturbs the neighborhood or is maintained for purposes
that are injurious to the public morals, health, convenience or
safety. For example, a licensed outlet that 1) disturbs the
neighborhood with noise, loud music, loitering, littering,
vandalism, urination or defecation by patrons, graffiti, etc.;
or 2) has many crimes ongoing inside, such as drunks, fights,
assaults, prostitution, narcotics, etc. The licensed premise
includes the parking lot. Any licensee, or employee of any
licensee, who keeps or permits such a disorderly house is guilty
of a misdemeanor, and the license is subject to disciplinary
action. (B&P Code Sections 25601 and 24200)
Penalty for selling an alcoholic beverage to a minor or
permitting a minor to consume an alcoholic beverage in an
on-sale premises: The law requires the suspension of a license
for a second or subsequent violation within a 36-month period.
The law also authorizes the revocation of a license for a third
violation within a 36-month period. ABC may revoke a license
prior to a third violation when the circumstances warrant it.
(B&P Code Section 25658.1)
In support: Writing in support, Alcohol Justice (formerly Marin
Institute) states, "The state already suffers more than $38
billion dollars in alcohol-related harm and over 10,000
alcohol-related deaths annually. This bill will help safeguard
public health and safety and reduce the number of problem
alcohol retailers in California."
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Also writing in support, The California Council on Alcohol
Problems states, "quite frankly, we were a little shocked to
learn that the ABC Director currently lacks the authority to do
what this reasonable bill authorizes, which is to be able to
suspend the alcohol license of a business if the department
deems that there is an urgent or immediate threat to the health
and safety of the public. The bill assures due process rights
to the licensee."
In opposition: There is no opposition on file.
Prior legislation: AB 2151 (Jones) of 2008, was vetoed by the
Governor. AB 2151 added provisions to the ABC Act for the
purpose of assisting local governments in their effort to
control the issuance and transfer of liquor licenses.
AB 2893 (Hancock), Chapter 253, Statutes of 2008. Grants ABC
the authority to impose restrictions on retail license transfers
in instances where the license transferor has been cited for
multiple violations of the ABC 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 alcoholic beverage license, when a licensee
fails to take reasonable steps to correct objectionable
conditions on the licensed premises or any public sidewalk
abutting a licensed premise, as provided, after specified notice
from the district attorney, city attorney, or a county counsel.
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AB 624 (Oropeza), Chapter 931, Statutes of 2001. Permitted ABC
to take into account neighboring crime statistics in the area of
the site of the establishment when transferring an alcohol
license. Furthermore, extended the time local entities have to
respond to the notice of a new or transferred license and
require the notification of local property owners around the
site.
AB 1092 (Lowenthal), Chapter 499, Statutes of 1999. Authorized
ABC to place reasonable restrictions upon retail licenses or any
licensee in the exercise of retail privileges if ABC adopts
conditions required by a local governing body.
AB 2897 (Caldera), Chapter 630, Statutes of 1994. Among other
things, granted ABC the authority to deny an application for a
license if issuance would tend to create a law enforcement
problem, or would result in or add to an undue concentration of
licenses. In addition, provided that a license may be issued if
the local governing body of the area in which the applicant
premises are located determines that public convenience or
necessity would be served by the issuance.
AB 463 (Tucker), Chapter 627, Statutes of 1994. Authorized ABC
to suspend or impose new conditions on a licensee who has failed
to correct "reasonable conditions" as noticed by a local
official.
AB 2742 (Lee), Chapter 629, Statutes of 1994. Made a series of
changes relating to ABC licensing and standards, including 1)
establishing general operating standards with respect to the
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licensed premise of retailers of alcoholic beverages, 2)
providing that the current 30-day review process shall be
extended by 20 days to give the local jurisdictions more
authority and opportunity for related input, 3) requiring ABC to
notify the entity or official in writing as to why they
recommend that a license be issued after a protest has been made
by an entity or official, as specified, and 4) providing
additional regulation of a licensee, as specified.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0003041