BILL ANALYSIS                                                                                                                                                                                                    



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          Date of Hearing:  April 6, 2016


                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION


                                  Adam Gray, Chair


          AB 2739  
          (Chiu) - As Introduced February 19, 2016


          SUBJECT:  Department of Alcoholic Beverage Control:  special  
          on-sale general license:  for-profit theater


          SUMMARY:  Deletes in a provision in current law that the  
          Department of Alcoholic Beverage Control (ABC) shall not issue a  
          special on-sale general license to the operator of any  
          for-profit theater located within the City and County of San  
          Francisco, configured with theatrical seating of at least 1,000  
          seats and primarily devoted to live theatrical performances  
           until any existing licenses issued by the department to the  
          operator for the premises of the for-profit theater are  
          canceled  .


          EXISTING LAW:  


          1) Establishes ABC and grants it exclusive authority to  
          administer the provisions of the Alcoholic Beverage Control 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.









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          2)  Provides ABC may issue a special on-sale general license to  
          any nonprofit theater company that meets specified requirements.  
           Theater companies holding a license pursuant to these  
          provisions may only sell and serve alcoholic beverages to  
          ticketholders during, and two hours prior to and one hour after,  
          a bona fide theater performance of the company.  There are 90 of  
          these Type 64 licenses in California for non-profit theater  
          companies who meet the specified requirements.  All licenses are  
          renewed on a 12-month basis.


          3)  Provides ABC may issue a special on-sale general license to  
          the operator of any for-profit theater located within the City  
          and County of San Francisco, configured with theatrical seating  
          of at least 1,000 seats and primarily devoted to live theatrical  
          performances.


          4)  Prohibits that special on-sale general license from being  
          issued until any existing licenses issued by the department to  
          the operator for the premises of the for-profit theater are  
          canceled.


          5)  Provides 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 live theatrical  
          performance is completed, as specified.  


          6)  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  








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          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 operated as  
          a bona fide public eating-place.


          7)  Stipulates that the theater shall not be subject to an  
          existing provision of the ABC Act that prohibits the  
          transferring of a license unless the applicant can show that  
          substantial public demand cannot otherwise be satisfied.   
          Specifies that a "for-profit theater" shall not include an adult  
          or sexually oriented business, as defined in Penal Code Section  
          318.5.


          8)  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.


          9)  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.  


          FISCAL EFFECT:  Unknown


          COMMENTS:  









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           Background  :  In 2013, AB 525 (Ting), Chapter 235, created a new  
          special on-sale general license in the ABC Act that enabled the  
          operator of any for-profit theater (Curran, Orpheum and Golden  
          Gate Theatres), 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.  The measure was intended to create a special license  
          category to accommodate the business goals of an operator of any  
          for-profit theater located in the City and County of San  
          Francisco.


          Before the passage of AB 525, patrons of a for-profit theater  
          located in the City and County of San Francisco were prevented  
          from approaching service bars to purchase alcoholic and  
          non-alcoholic beverages and carrying those drinks elsewhere in  
          the lobby or to their seats.  The bill was a narrowly crafted to  
          enhance the experience of theatergoers at many of the city's  
          grand historically renovated theaters.  Additionally, the  
          measure contained several provisions to ensure appropriate  
          controls relating to licensing.


           Purpose of the bill : The author states this bill will make a  
          change to the above-mentioned bill relating to the issuance of a  
          special on-sale general license (Type 71) for any for-profit  
          theater in the City and County of San Francisco.  Such a license  
          enables each theater to serve beer, wine, and distilled spirits  
          to patrons.  





          The Curran Theatre, which opened in February 1922, closed on  
          January 1, 2015 for renovations to the 1,650-seat theater, and  
          is set to reopen in January 2017.  Prior to its closure, the  
          Curran Theatre was operated by an ABC licensee that will no  








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          longer have ownership interest in the theater or the alcohol  
          beverage service when it reopens.  AB 2739 would delete the  
          requirement that prior to ABC issuing a Type 71 license; any  
          existing license issued for the premises must be "cancelled" by  
          the operator.





          The author states that a change in statute is necessary because  
          current law did not take into account the possibility that an  
          owner or operator of an existing theater may change ownership,  
          which would leave the new owner without the ability to apply for  
          and be issued a new license by ABC unless the prior license is  
          cancelled by the previous owner(s).  This requirement will  
          prevent the Curran Theatre from applying for a new special  
          on-sale general license or from serving alcoholic beverages to  
          its patrons when it reopens to the public in January 2017. 





          The author further states that the "cancellation" requirement is  
          a unique licensing process and is inconsistent with how other  
          licenses are issued by the department under the ABC Act and  
          specific policies that allow for the application and purchase of  
          a new license from the ABC by the new owner or operator of a  
          premise.


           Prior legislation  :  AB 525 (Ting), Chapter 235, Statutes of  
          2013.  Created a new special on-sale general license in the ABC  
          Act that enables the operator of any for-profit theater, as  
          specified, located within the City and County of San Francisco,  
          to serve alcoholic beverages during certain hours in specified  
          areas of the theater.  









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          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,  
          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. 








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          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.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Curran Live, LLC




          Opposition


          None on file




          Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531













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