BILL ANALYSIS
AB 2296
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2296 (Leno)
As Amended June 9, 2004
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |77-0 |(May 10, 2004) |SENATE: |33-0 |July 12, 2004 |
-----------------------------------------------------------------
Original Committee Reference: G. O.
SUMMARY : Requires an individual who protests the issuance of an
alcohol license, to additionally file for a hearing on their
issues in order for them to be considered prior to the issuance
of a license. Specifically, this bill :
1)Repeals in the case of a protest of the issuance of a license
to engage in the sale of alcoholic beverages that a hearing
shall be held not more than 60 days after receipt of the
protest by the state Office of Administrative Hearings (OAH)
and instead would establish procedures to be followed in cases
in which the Department of Alcoholic Beverage Control (ABC),
recommends that a license be issued, notwithstanding that one
or more protests have been accepted by ABC.
2)Permits ABC to reject protests it determines to be frivolous,
in addition to other described conditions.
3)Provides that if, after investigation, ABC recommends that a
license be issued, with or without conditions, notwithstanding
that one or more protests have been accepted by the
department, ABC shall notify the applicant and all protesting
parties whose protests have been accepted in writing of its
determination.
4)Provides that any person who has filed a verified protest in a
timely fashion as specified, that has been accepted as
described, may request that ABC conduct a hearing on the issue
or issues raised in the protest. The request shall be in
writing and shall be filed with ABC within 15 calendar days of
the date the department notifies the protesting party of its
determination.
5)Specifies that at any time prior to the issuance of the
license, ABC may, in its discretion, accept a late request for
AB 2296
Page 2
a hearing upon a showing of good cause.
6)Specifies that if a timely request for a hearing is filed with
ABC, the department shall schedule a hearing on the protest.
The issues to be determined at the hearing shall be limited to
those issues raised in the protest or protests of the person
or persons requesting the hearing.
7)Provides that if no request for a hearing is filed with ABC,
any protest or protests shall be deemed withdrawn and ABC may
issue the license without any further proceeding.
8)Provides that if the person filing the request for a hearing
fails to appear at the hearing, the protest will be deemed
withdrawn.
The Senate amendments :
1)Permit ABC to reject protests it determines to be frivolous.
2)Provide for a hearing upon the request of any of these
protesting parties who have filed a timely verified protest in
a timely fashion pursuant to existing law.
3)Provide that the protest is deemed withdrawn if the person
requesting the hearing fails to appear at that hearing.
EXISTING LAW :
1)Provides, constitutionally, "that the State of California . .
. shall have the exclusive right and power to license and
regulate the manufacture, sale, purchase, possession, and
transportation of alcoholic beverages within the State...".
(Article XX, Section 22, State Constitution).
2)Establishes ABC to provide strict, honest, impartial, and
uniform administration of the liquor laws throughout
California.
3)Provides that after filing an application to engage in the
sale of any alcoholic beverage at any premises, notice of
intention to so commence shall be posted in a conspicuous
place at the entrance to the premises. The applicant shall
notify ABC of the date when such notice is first posted. No
license shall be issued for the premises until the notice has
AB 2296
Page 3
been so posted for at least 30 consecutive days.
4)Requires ABC to notify the local sheriff, chief of police,
district attorney and local legislative body regarding an
application for the issuance or transfer of a liquor license,
and no action can take place for at least 30 days after this
notification. ABC may extend the 30-day period specified in
the preceding sentence for a period not to exceed an
additional 20 days, upon the written request of any local law
enforcement agency that states proper grounds for extension.
5)Provides that protests against the issuance of a liquor
license may be filed with ABC.
6)Permits ABC to reject protests, except protests made by a
public agency, public official, or governing body of a city or
county, it determines to be false, vexatious, or without
reasonable or probable cause.
7)Permits a protestant whose protest has been rejected to file
an accusation with ABC, in which case ABC is required to hold
a hearing, as specified.
8)Requires, in the case of a protest of the issuance of a liquor
license, that a hearing be held not more than 60 days after
the receipt of the protest by OAH.
AS PASSED BY THE ASSEMBLY , this bill required an individual who
protests the issuance of an alcohol license, to additionally
file for a hearing on their issues in order for them to be
considered prior to the issuance of a license.
FISCAL EFFECT : Savings in the range of $30,000 to the extent
the new process reduces the number of protest hearings
facilitated by administrative law judges (ALJs).
COMMENTS : The author is carrying this measure on behalf of the
California Grocers Association. According to the author,
protests filed against new license applicants by competing
businesses, neighbors, and others can have an impact on
meritorious projects for months simply by filing a protest ABC.
At times, protesters simply do not appear at the hearing that
they have demanded. While this ultimately results in the
dismissal of their protest, the applicant, their attorneys and
ABC must nonetheless prepare for hearing (including witnesses,
AB 2296
Page 4
subpoenas, experts, etc.) and pay for all the costs in
preparation for the hearing. ABC not only pays for the time of
its attorneys and investigators, it must also pay for a
courtroom, a court reporter, and a full day of time for an ALJ.
These costs are typically in the tens of thousand of dollars,
which is a serious drain on the resources of all involved.
This bill would establish a simple confirmation that protesters
plan to actually attend a hearing, which will reduce waste in
the hearing process.
ABC is vested with exclusive authority, in accordance with laws
enacted, to license and regulate the manufacture, distribution,
and sale of alcoholic beverages within California. ABC also has
the power for good cause to suspend, revoke or deny a license if
it determines that granting or continuance of the license would
be contrary to public welfare or morals. All ABC decisions may
be appealed to the ABC Appeals Board.
Currently, there are restrictions on the issuance of licenses in
areas of undue concentration of retail licenses. 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 conduct of the licensee.
If a retail license application has been protested and ABC has
recommended approval of the license, ABC may issue an Interim
Operating Permit upon the applicant's written request. If an
application is withdrawn because of a protest being filed, an
applicant may not re-file an application at the same premises
for one year, and all protests remain valid for one year against
any subsequent applications filed by other persons at the
premises.
Some grounds for protest or denial of a license are: a)
applicant is not qualified. For example, the applicant
falsified his application, has a disqualifying police record,
has a record of chronic insobriety, is not the true owner, or is
not at least 21 years of age; and/or, b) premises is not
suitable. For example the premises is too close to a school,
AB 2296
Page 5
church, hospital, playground, nonprofit youth facility or
residence, and would disturb the facility or resident; the
premises is located in a high-crime area and does not serve
public convenience or necessity; the applicant does not have
legal tenancy; the license would create a public nuisance; or,
zoning is improper for alcohol sales.
ABC which is neutral on this bill, notes that current law
requires the department to conduct hearings on protested license
applications unless the protest is rejected, as false, vexatious
or without reasonable or probable cause, or the protesting party
or parties withdraw their protests. Many times, hearings
are scheduled, and both ABC and the applicant expend
considerable time and resources preparing documents and
witnesses, yet the protesting party does not show up, resulting
in dismissal of the protest and issuance of the license.
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
FN: 0006727