BILL ANALYSIS
SB 415
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Date of Hearing: June 24, 2009
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chairman
SB 415 (Oropeza) - As Introduced: February 26, 2009
SENATE VOTE : 23-16
SUBJECT : Alcoholic beverages: licenses: local government
review.
SUMMARY : Expands the eligibility list of local government
officials (not only law enforcement agencies) who may request an
extension of time to review the issuance or transfer of an
alcoholic beverage license and lengthens the existing extension
period from 20 to 30 days. Specifically, this bill :
1)Authorizes the Department of Alcoholic Beverage Control (ABC)
to extend the 30-day period for a period not to exceed an
additional 30 days if a proper written request is made by any
entity or official receiving the required notification under
current law.
EXISTING LAW :
1)The enactment of the 21st Amendment to the U.S. Constitution
in 1933 repealed the 18th Amendment and ended the era of
Prohibition. Accordingly, states were granted the authority
to establish alcoholic beverage laws and administrative
structures to regulate the sale and distribution of alcoholic
beverages.
2)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.
3)Requires the ABC to notify the appropriate sheriff, chief of
police, district attorney, city or county planning agency, and
legislative body of an application for the issuance or
transfer of a liquor license, and prohibits the ABC from
issuing or transferring a license until at least 30 days after
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these notices are provided. Existing law authorizes the ABC
to extend that 30-day period for a period not to exceed 20
days if a proper written request is made by any local law
enforcement agency .
4)Authorizes ABC to impose reasonable conditions on the exercise
of retail privileges under the Act. The ABC may impose
conditions on certain license transfers at the request of a
local governing body in whose jurisdiction the license is
located.
5)Specifies the grounds that constitute a basis for the
suspension or revocation of an alcoholic beverage license,
including a licensee's failure, within a reasonable time,
after specified notice from a district attorney, city
attorney, county counsel, or the ABC to take reasonable steps
to correct objectionable conditions on the licensed premises,
as specified.
FISCAL EFFECT : Unknown.
COMMENTS :
Background:
Alcohol oversight : ABC is vested with the exclusive authority
to license and regulate the manufacture, distribution and sale
of alcoholic beverages within California. ABC has the authority
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, a three-member body appointed
by the Governor, subject to Senate confirmation.
There are currently more than 70,000 alcoholic beverage licenses
throughout the state. This includes both "on-sale" and
"off-sale" establishments that sell beer and wine, and "on-sale"
and "off-sale" general licensees that also sell distilled
spirits. ABC is required to investigate both the applicant and
the premises for, which a license is applied, to determine if
the public would be adversely affected by the
license issuance. These investigations include an evaluation of
the moral character of the applicant and the suitability of the
proposed premises.
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ABC must deny an application for a license if issuance would
create a law enforcement problem or if issuance would result in,
or add to, an undue concentration of licenses in the area where
the license is desired. For liquor stores and other specified
retail licenses, however, ABC is authorized to issue a license
if the respective local government determines that public
convenience or necessity would be served by granting the
license.
State law caps the number of new "on and off-sale" general
licenses issued by 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."
State v. local control of alcohol policy : 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 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 local jurisdiction.
Purpose of the bill : According to the author's office, this
bill continues the effort to expand local government involvement
in the ABC license process. Specifically, this bill seeks to
clarify that local government agencies can request a twenty day
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extension for the review of a license; not just a law
enforcement agency as specified under current law.
Additionally, the author's office indicates that the current
20-day extension period does not provide adequate time for local
governments, which may only meet once a month to properly
address possible concerns with a license. Thus, SB 415
asks for an additional 10 days of review to better accommodate
local government meeting schedules.
ABC reports that under current law, from the 10,000 to 12,000
licenses processed each year, generally there are 20-25 requests
by local law enforcement agencies for a time extension to review
the issuance or transfer of an alcoholic beverage license.
In Support : Proponents state that they are supportive of
methods that permit additional involvement by local entities in
the application review process. Proponents believe that this
measure will enable communities to review and manage any
pertinent public safety and economic issues related to the sale
of alcoholic beverages.
In Opposition : Opponents argue that SB 415 is unnecessary
because existing law provides a sufficient 30-day initial review
and comment period, plus an optional 20-day extension allowance.
Thus, under current law, local law enforcement agencies have up
to 50-days to review and comment upon a license application.
Additionally, opponents believe that expanding the range of
entities that can formally request an extension for review could
lead to overzealous individuals unnecessarily delaying the
start-up of a new business venture. Opponents emphasize that
jurisdiction over alcoholic beverage licensing has always been
held by the state and not local government - this measure would
result in an inappropriate expansion of local authority over
retail licensing.
Prior Legislation :
SB 450 (Oropeza) 2007-08 Session. Would have authorized ABC to
extend the 30-day waiting period affecting the issuance or
transfer of a liquor license for a period not to exceed an
additional 20 days if a proper written request is made by any
entity or official receiving the required notification. Also,
would have added a new provision to the ABC Act requiring a
licensee to prominently display signage providing contact
information for local law enforcement and the ABC's district
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office for purposes of reporting possible violations by the
licensee. (Failed passage in Senate G.O. Committee)
AB 2672 (Oropeza) 2005-06 Session. Would have increased the
extension period for local government review of liquor license
applications or transfers from 20 to 30 days provided proper
written request is made by any entity or official receiving the
required notification. (Died Senate Inactive File)
SB 148 (Scott) Chapter 625, Statutes of 2006. Among other
things, provided additional bases for the suspension or
revocation of an ABC license, when a licensee fails to take
reasonable steps to correct objectionable conditions on the
licensed premises or on any public sidewalk abutting a licensed
premises, as provided, after specified notice from the district
attorney, the city attorney, or a county counsel.
AB 624 (Oropeza) Chapter 931, Statutes of 2001. Among other
things, permitted ABC to take into account neighboring crime
statistics in the area of the site of the establishment when
transferring a license. Also, extended the time period local
entities have to respond to the notice of a new or
transferred license and required the notification of local
property owners adjacent to the site.
AB 1092 (Lowenthal), Chapter 499, Statutes of 1999, authorizes
ABC to place reasonable restrictions upon retail licenses or any
licensee in the exercise of retail privileges if ABC adopts
conditions requested by a local governing body.
REGISTERED SUPPORT / OPPOSITION :
Support
California Council on Alcohol Policy
City of Antioch
City of Costa Mesa
City of Hermosa Beach
City of Long Beach
City of Rancho Cordova
City of San Luis Obispo
Hermosa Beach, City of
League of California Cities
South Bay Cities Council of Governments
West County Alcohol Policy Working Group
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Opposition
California Grocers Association
Family Winemakers of California
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531