BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 2739 Hearing Date: 6/14/2016
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|Author: |Chiu |
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|Version: |2/19/2016 Introduced |
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|Urgency: |Yes |Fiscal: |Yes |
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|Consultant:|Arthur Terzakis |
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SUBJECT: Department of Alcoholic Beverage Control: special
on-sale general license: for-profit theater
DIGEST: This bill deletes the requirement that a special
on-sale general license for a for-profit theater in San
Francisco cannot be issued until any existing license is
canceled.
ANALYSIS:
Existing law:
1)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.
2)Establishes various alcoholic beverage license categories and
a schedule of annual fees charged to the licensees.
3)Authorizes the Department of 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
AB 2739 (Chiu) Page 2 of ?
company.
4)Provides that the Department of ABC may 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 to sell
and serve 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 completion of the performance.
5)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 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.
6)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.
This bill:
1)Deletes the requirement that a special on-sale general license
for a for-profit theater, within the City and County of San
Francisco, cannot be issued by the Department of ABC until any
existing licenses for the premises of the theater are
canceled.
2)Contains an urgency clause, to take effect immediately.
Background
Current law provides for the issuance of a special on-sale
general license (Type 71) that enables the operator of any
AB 2739 (Chiu) Page 3 of ?
for-profit theater configured with theatrical seating of at
least 1,000 seats and located within the City and County of San
Francisco to serve alcoholic beverages (beer, wine and spirits)
during certain hours in specified areas of the theater. [AB 525
(Ting, Chapter 235, Statutes of 2013)]
AB 525 of 2013 was narrowly crafted to enhance the experience of
theatergoers at several of San Francisco's grand and historic
theaters (e.g., Curran, Orpheum & Golden Gate theaters) and
contained several provisions to ensure appropriate controls
relating to licensing including prohibiting the issuance of such
a license until any existing license is canceled.
Purpose of AB 2739. According to the author's office, this bill
has been introduced on behalf of Curran Live, LLC, which
operates the historic Curran Theater in San Francisco. The
Curran Theater, which opened in February 1922, closed on January
1, 2015 for renovations and is scheduled to reopen in January
2017. Prior to its closure, the Curran Theater was operated by
an ABC licensee that will no longer have an ownership interest
in the theater or the alcoholic beverage service when it
reopens.
The author's office contends 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 canceled by the previous owner(s). The
author's office argues that this existing requirement prevents
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.
Staff Comments. As noted above, the Curran Theater will be under
new ownership when it reopens in January 2017. The current
special on-sale general license (Type 71) for the premises is
under surrender - meaning it's still a valid license, tied to
the theater location, but inactive. The new ownership of the
theater is ineligible for a new type 71 license until the
existing license is canceled. Cancellation of the existing
license requires an action on the part of the licensee; however,
the licensee is unable or unwilling to do so. By deleting the
requirement that any existing license issued for the premises
must be canceled prior to the issuance of a new license this
AB 2739 (Chiu) Page 4 of ?
bill will enable the new owners of the theater to apply for a
special on-sale general license for the theater premises.
Prior/Related Legislation
AB 1670 (Dodd, 2016) authorizes the Department of ABC to issue a
total of 25 additional new original on-sale general licenses, as
specified, to bona fide public eating places with a seating
capacity of 25 or more diners, in Napa County. Also authorizes
ABC to issue a special on-sale general license to the operator
of any for-profit theater located within Napa County, subject to
certain requirements and conditions. (Pending in this
Committee)
AB 525 (Ting, Chapter 235, Statutes of 2013) created a new
special on-sale general license in the ABC Act that enabled 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 to serve alcoholic beverages during certain hours
in specified areas of the theater.
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.
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
AB 2739 (Chiu) Page 5 of ?
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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
Curran Live, LLC
OPPOSITION:
Alcohol Justice
ARGUMENTS IN OPPOSITION: Alcohol Justice states that "granting
yet another regulatory exemption for a segment of the alcohol
retailers only further erodes fair and effective alcohol
regulation in California. The state already suffers more than
$22 billion in alcohol-related harm and over 10,000
alcohol-related deaths annually. We believe AB 2739 will
ultimately increase those catastrophic alcohol-related harms and
costs in the state."