BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 325


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          Date of Hearing:  July 15, 2015 


                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION


                                  Adam Gray, Chair


          SB  
          325 (Hall) - As Amended March 26, 2015


          SENATE VOTE:  34-0


          SUBJECT:  Alcoholic beverages.


          SUMMARY:  Modifies an existing Alcoholic Beverage Control Act  
          (Act) provision that requires the Department of Alcoholic  
          Beverage Control (ABC), on or before March 1 of each year, to  
          produce a specified annual report to the Legislature and  
          instead, requires the department to provide the report upon  
          request of the Legislature.  The bill also makes clarifying  
          changes to an outdated provision of law relating to airline  
          "club" licenses to reflect current business models.   
          Specifically, this bill:  


          1)Eliminates the existing requirement that ABC, on or before  
          March 1 of each year, prepare and submit to the Legislature an  
          annual report on ABC's activities and, instead, provides that  
          ABC shall produce such a report upon request of the Legislature.













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          2)Clarifies that the restrictions relating to nonprofit status  
          and number of members do not apply to club licenses issued to  
          clubs operated by common carriers by air at an airport terminal.  
           


          EXISTING LAW:   


          1)Establishes 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 for this purpose. 





          2)Requires the Director of ABC, on or before March 1 of each  
          year, to make an annual report to the Legislature on the  
          Department of ABC's activities and to post the report on its  
          Internet Web site.  (B & P Code Section 23055)





          3)Defines "club," for purposes of the Act, to mean a corporation  
          or association which is the owner, lessee, or occupant of an  
          establishment operated solely for objects of a social or  
          athletic nature but not for pecuniary gain, having a bona fide  
          membership list, and the majority of the members of which pay  
          dues at least once in every year, and the property as well as  
          the advantages of which belong to the members, and which sells  
          alcoholic beverages only to its members and its bona fide  
          guests.  (B & P Code Section 23037)









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          4)Provides for the issuance of a "club" license allowing the  
          sale of alcoholic beverages to a plethora of clubs/organizations  
          (e.g., golf club, swimming club, tennis club, horse riding club,  
          beach and athletic club, handball or racquetball club, nonprofit  
          mobile homeowners social club, national fraternal organizations,  
          rod and gun club, peace officers and firefighters associations,  
          nonprofit social and religious club, National Guard or Air  
          National Guard club, labor council, American Citizens club,  
          local dental society club, condominium homeowners' association,  
          Hidalgo Society, nonprofit lawn bowls club, etc.). 





          5)Authorizes the issuance of a club license to clubs operated by  
          common carriers by air at an airport terminal, as specified.  (B  
          & P Code Section 23428.13) 





          6)Prohibits ABC from issuing new club licenses to clubs that are  
          not organized as a nonprofit (B & P Code Section 23434).  Also,  
          prohibits ABC from issuing new club licenses to clubs that do  
          not have at least 100 members (B & P Code Section 23435).


          FISCAL EFFECT:  Unknown


          COMMENTS:  










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           Purpose of the bill  .  This bill is simply intended to make  
          technical, clarifying and non-controversial changes to the Act.





          Existing law requires ABC, on or before March 1 of each year, to  
          provide an annual report to the Legislature on the department's  
          activities and to post the report on its Internet Web site.  The  
          report must include information for the previous fiscal year  
          pertaining to:  (1) the amount of funds allocated and spent for  
          licensing, enforcement, and administration: (2) the number of  
          licenses issued, renewed, denied, suspended, and revoked; (3)  
          the average time for processing license applications, by license  
          category; (4) the number and type of enforcement activities  
          conducted; and, (5) the number, type, and amount of penalties,  
          fines, and other disciplinary actions taken.





          ABC has been producing and providing workload reports for the  
          industry it regulates and groups interested in its licensing and  
          enforcement activities since 1941.  In 1999, ABC began posting  
          all of its annual reports on the department's Internet Web site.  
           For example, ABC provides on an annual basis: the Annual  
          Workload Summary, the Performance Management Report, and the  
          License Count Summary Report.  ABC indicates that all of the  
          information requested by Business and Professions Code Section  
          23055 is already captured in the department's various reports.





          This bill modifies the annual reporting requirement to instead  
          require ABC to provide the report upon request of the  








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          Legislature.  The author's office emphasizes that this bill does  
          not eliminate the statutory requirement for the report - it  
          simply eliminates the requirement for a separate annual report  
          to the Legislature thus enabling ABC to use its resources for  
          other purposes.  ABC believes that providing a separate report  
          for the Legislature is duplicative and consumptive of limited  
          resources and staff.





          The author's office points out that over the years numerous  
          "club" licenses have been added to the Act allowing the license  
          holder to sell and serve alcoholic beverages for consumption  
          within the licensed establishment and only to members of the  
          club and their guests.  Currently, the law prohibits ABC from  
          issuing "airline" club licenses to clubs that are not organized  
          as a nonprofit or which do not have at least 100 members.  The  
          author's office notes that this particular law no longer  
          reflects the structure of the current licensees.  Specifically,  
          airline club licenses are no longer established as nonprofits  
          and the 100-member requirement is no longer needed.  Therefore,  
          this bill proposes to amend outdated licensing requirements for  
          this type of licensee to reflect the realities of the business  
          models currently in place.  





           Prior legislation  .  AB 749 (Hall, Chapter 221, Statutes of  
          2011).  Changed the period covered by ABC's annual report to the  
          Legislature from a "calendar" year time period to a "fiscal"  
          year.


           









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          SB 1480 (Committee on Governmental Organization, Chapter 296,  
          Statutes of 2010).  Among other things, deleted the requirement  
          that the Director of ABC to include recommendations for  
          legislation in the annual ABC report to the Legislature.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition


          None on file




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

















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