Under existing law, the Alcoholic Beverage Control Act is administered by the Department of Alcoholic Beverage Control through the Director of Alcoholic Beverage Control. Existing law authorizes the department to issue a special on-sale general license to the operator of any for-profit theater located within the City and County of San Francisco, as specified. Existing law 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.

This bill would delete that prohibition.

This bill would declare that it is to take effect immediately as an urgency statute.

Under existing law, the Alcoholic Beverage Control Act is administered by the Department of Alcoholic Beverage Control through the Director of Alcoholic Beverage Control. Existing law authorizes the department to issue a special on-sale general license to the operator of any for-profit theater located within the City and County of San Francisco, as specified. Existing law 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.

This bill would delete that prohibition.

This bill would declare that it is to take effect immediately as an urgency statute.

Under existing law, the Alcoholic Beverage Control Act is administered by the Department of Alcoholic Beverage Control through the Director of Alcoholic Beverage Control. Existing law authorizes the department to issue a special on-sale general license to the operator of any for-profit theater located within the City and County of San Francisco, as specified. Existing law 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.

This bill would delete that prohibition.

This bill would declare that it is to take effect immediately as an urgency statute.

 THIRD READING  

Bill No: AB 2739

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 6/14/16

AYES: Hall, Bates, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Vidak

NO VOTE RECORDED: Berryhill

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 76-0, 4/28/16 (Consent) - See last page for vote

SUBJECT:

SOURCE: Curran Live, LLC

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 Alcoholic Beverage Control (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 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 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.

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 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, from 1/1/2017 to 12/31/2017, no more than a total of 5 additional new original on-sale general licenses for bona fide public eating places 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 Senate Appropriations 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.

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:

(Verified 8/1/16)

Curran Live, LLC (source)

OPPOSITION: (Verified 8/1/16)

Alcohol Justice

ARGUMENTS IN SUPPORT: - - -

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.”

ASSEMBLY FLOOR: 76-0, 4/28/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Chávez, Daly, Mathis, Olsen

Prepared by:

8/3/16 18:40:33

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: 2739 Hearing Date: 6/14/2016

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 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 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 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 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: Fiscal Com.: Local:

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.”

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2739

Author:(Chiu) – As Introduced Ver:February 19, 2016

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

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.

FISCAL EFFECT:

Negligible state costs.

COMMENTS:

1. Background and purpose. AB 525 (Ting), Chapter 235 in 2013, created a new special on-sale general license for for-profit theaters, configured with theatrical seating of at least 1,000 seats and primarily devoted to live theatrical performances, located within San Francisco. Before the passage of AB 525, patrons of a for-profit theater located in San Francisco were prevented from approaching service bars to purchase alcoholic and nonalcoholic beverages and then carrying those drinks elsewhere in the lobby or to their seats.

AB 525 includes provisions to ensure appropriate controls relating to licensing. One such provision requires the for-profit theater to cancel their existing license to secure the new license. This prevents any theater receiving this new special on-sale general license from selling its existing license on the open market. According to the author of AB 2739, this provision also has the unintended effect of preventing a new eligible theater owner from obtaining this special on-sale general license in the event of a change in ownership. The Curran Theatre, which opened in February 1922, closed on January 1, 2015 for renovations and is set to reopen in January 2017. Prior to its closure, the Curran Theatre was operated by a licensee who will no longer have ownership interest in the theater when it reopens, and under existing law, that license will need to be cancelled by the previous owner. AB 2739 removes the requirement that the existing license must be canceled so as to allow the new owner to apply for this special on-sale general license.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: April 6, 2016

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

ABPCA Bill Id:AB 2739 (

Author:Chiu) – As Introduced Ver: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.

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 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:

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 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.

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.

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