The Alcoholic Beverage Control Act prohibits the sale, furnishing, giving, or giving away of alcoholic beverages to, or the purchase of alcoholic beverages by, persons under the age of 21 years, and imposes penalties in that regard.

Under the act, a licensee may petition the department Department of Alcoholic Beverage Control for an offer in compromise when a decision by the department to suspend a license becomes final, but not for a 3rd or subsequent violation of the provisions referenced above that occurs within 36 months of the initial violation. The act authorizes the department to revoke a license for a 3rd violation of those provisions within a 36-month period, as specified.

The Alcoholic Beverage Control Act prohibits the sale, furnishing, giving, or giving away of alcoholic beverages to, or the purchase of alcoholic beverages by, persons under the age of 21 years, and imposes penalties in that regard.

Under the act, a licensee may petition the department for an offer in compromise when a decision by the department to suspend a license becomes final, but not for a 3rd or subsequent violation of the provisions referenced above that occurs within 36 months of the initial violation. The act authorizes the department to revoke a license for a 3rd violation of those provisions within a 36-month period, as specified.

This bill would authorize a licensee who has violated those provisions and has not had another violation of those provisions within the prior 36 months to attend a responsible retailer class that lasts at least 6 hours and is conducted by a training organization. The bill requires that the department, upon receiving proof of attendance by the licensee, not consider that violation for the above-described purposes.

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 271 (Mendoza) - Alcoholic beverages: minors: license suspension and revocation

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 271 would authorize the Department of Alcoholic Beverage Control (ABC) to not aggregate a first violation of provisions relating to selling or furnishing alcoholic beverages to a minor, for the purposes of determining penalties, suspension, or an offer, if the licensee or designee has completed or agrees to complete a Responsible Retailer Course within six months of the date of settlement or final decision.

Fiscal Impact:

• One-time costs of $20,000 to ABC for programming to track completed certifications. (ABCF)
• Significant costs of approximately $100,000 in fiscal year 2018-19, and ongoing costs of $200,000 to ABC for additional staffing to draft regulations for and implement the program, to maintain records of violations and training certificates, and to initiate and review appropriate legal action when appropriate. (ABCF)
• Potential revenue loss to ABC of approximately $1 million annually from fines that may no longer be collected due to first violations. (ABCF)

Background:

Existing law establishes that it is illegal to sell, furnish, or give away any alcoholic beverage to a person under 21 years of age. Any person licensed by ABC to sell alcohol faces specific punishments if the law is violated. Current law authorizes ABC to issue a 15-day suspension to a licensee for a first violation of provisions related to the sale or furnishing of alcoholic beverages to a person under the age of 21; a licensee can pay a fine in lieu of serving the suspension. A first offense fine can be levied at $750-$3,000, or a sum of money equal to 50% of the estimated gross receipts from the sale of alcoholic beverages during the period of suspension. In fiscal year 2013-14 approximately 40% of violations were first time violations.

The Responsible Beverage Services (RBC) is a type of training that is offered to promote public safety and reduce risks associated with the retail alcohol environment. ABC currently oversees the Licensee Education on Alcohol and Drugs (LEAD) Program, which is a free, voluntary, prevention and education class offered for retail licensees, their employees, and applicants. The LEAD Program provides practical information on serving alcoholic beverages safely, responsibly, and legally, preventing illicit drug activity, and more. At the conclusion of the class, an exam is given and each person that fulfills all of the training requirements receives a certificate certifying that they successfully completed a LEAD training course. Both the RBS and LEAD programs are voluntary training programs.

Proposed Law:

This bill would:

• Authorize ABC to not aggregate a first violation of provisions related to selling or furnishing alcoholic beverages to a person under 21 years of age the purposes of determining penalties, suspension, or an offer in compromise if the licensee, or agent or manager has completed or agrees to complete a Responsible Retailer Course within six months of the date of settlement or final decision;
• States that a Responsible Retailer Course shall provide at least six hours of instruction in the best practices to comply with provisions related to selling or furnishing alcoholic beverages to a person under 21 years of age, as specified;
• Require the licensee to pay the cost of completing a Responsible Retailer Course and submit to ABC a certificate of completion issued by the training provider;
• Provide that ABC may accept from a licensee a certificate of completion only if prior to accepting that certificate, ABC received from the training provider of the course an attestation under penalty of perjury that the course meets the specified requirements, and authorize ABC to reject a training provider’s attestation if ABC has reasonable ground to believe the course does not meet the specified requirements;
• Authorize a training provider to advertise or market a “Responsible Retailer Course” only if the course meets the specified requirements and the training provider has filed an attestation with ABC.

Related Legislation:

AB 1221 (Gonzalez-Fletcher, 2017) would establish the RBS Training Program Act of 2017 that would require an alcohol server to successfully complete an RBS training course offered by ABC. This bill is pending in the Assembly Appropriations Committee.

AB 2121 (Gonzalez, 2016) would have established the RBS Training Act of 2016, which would require an alcohol server to successfully complete an RBS training course from an accredited training provider within three months of employment and every three years thereafter. This bill was vetoed by Governor Brown.

SB 1102 (Budget and Fiscal Review Committee, Chapter 227, Statutes of 2004) among other things, authorized an alcoholic beverage licensee to petition ABC for an offer in compromise for a second violation that occurs within 36 months of the initial violation of provisions relating to selling or furnishing alcoholic beverages to minors.

AB 2715 (Hollingsworth, 2002) would have authorized an alcoholic beverage licensee to petition ABC for a training program in lieu of, or to mitigate a proposed license suspension or fine. This bill failed passage in the Assembly Governmental Organization Committee.

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SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Steven Glazer

Chair

2017 - 2018 Regular

Bill No: SB Hearing Date: 4/25/2017

SUBJECT:

DIGEST: This bill authorizes the Department of Alcoholic Beverage Control (ABC) to not aggregate a first violation of provisions relating to selling or furnishing alcoholic beverages to a minor, for the purposes of determining penalties, if the licensee or a specified designee has completed or agrees to complete a Responsible Retailer Course within six months of the date of the settlement or decision.

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 for this purpose.
2. Provides that every person who sells, furnishes, gives, or causes to be sold, furnished, or given away any alcoholic beverage to any person under 21 years of age is guilty of a misdemeanor.
3. Provides, within the ABC Act, various provisions regulating the application for, the issuance of, and the suspension of alcoholic beverage licenses by the Department of ABC.

1. Authorizes an alcoholic beverage licensee to petition the Department of ABC for permission to make an offer in compromise in any case in which the proposed suspension is less than 15 days, before the operative date of the suspension of the alcoholic beverage license, and to pay an amount in lieu of serving the suspension as provided.
2. Prohibits a licensee from petitioning the Department of ABC for an offer in compromise for a third or any subsequent violation of selling or furnishing of alcoholic beverages to a person under 21 years of age that occurs within 36 months of the initial violation.
3. Authorizes the Department of ABC to revoke a license for a third violation for selling or furnishing of alcoholic beverages to a person under 21 years of age that occurs within any 36-month period, and states that this provision shall not be construed to limit the authority and discretion of the Department of ABC to revoke a license prior to a third violation when the circumstances warrant that penalty.

This bill:

1. Authorizes the Department of ABC to not aggregate a first violation of provisions relating to selling or furnishing alcoholic beverages to a person under 21 years of age, for the purposes of determining penalties, suspension, or an offer in compromise if the licensee, or agent or manager, has completed or agrees to complete a Responsible Retailer Course within six months of the date of settlement or final decision.
2. Specifies that a licensee may designate an agent or manager who is engaged in day-to-day operations to take the Responsible Retailer Course.
3. States that a Responsible Retailer Course shall provide at least six hours of instruction and that the course shall include, but is not limited to, all of the following:
   1. State alcoholic beverage control laws and regulations pertaining to minors.
   2. Dangers of alcohol poisoning and the effects of alcohol on the body.
   3. Development of a compliance program that establishes policies and procedures.
   4. Other topics identified by the Department of ABC as appropriate, taking into consideration developments in the law, society, and the alcoholic beverage industry.
4. Requires the licensee to pay the cost of completing a Responsible Retailer Course.
5. Requires the licensee to submit to the Department of ABC a certificate of completion issued by the training provider to establish completion of a Responsible Retailer Course.
6. Provides that the Department of ABC may accept from a licensee a certificate of completion only if the Department of ABC, before accepting that certificate, received from the training provider of the course an attestation under penalty of perjury that the course meets the specified requirements.
7. Authorizes the Department of ABC to reject a training provider’s attestation if the Department of ABC has reasonable grounds to believe that the course does not meet the specified requirements.
8. Allows a training provider to advertise or market a “Responsible Retailer Course” only if the course meets the specified requirements and the training provider has filed an attestation with the Department of ABC.
9. Provides that it is the intent of the Legislature to establish a Responsible Retailer Course for retail licensees to encourage best practice to prevent the sale of alcohol to minors.

Background

Purpose of the bill. The author’s office states, “this bill provides an option to strengthen licensee’s knowledge of best practices to prevent sales to minors. Currently, there is a system of fines, suspension and license revocation that apply to minor alcoholic sales. Though this system is necessary to keep sellers in compliance, the key to being a responsible retailer is education. Many times when a violation occurs, no education is provided to help prevent that infraction again.”

Further, the author’s office notes that “this bill is intended to give the Department of ABC more flexibility in fixing a penalty against a licensee who could benefit from additional training.”

ABC penalties. It is the stated policy of the Department of ABC to impose administrative, non-punitive penalties in a consistent and uniform manner with the goal of encouraging and reinforcing voluntary compliance with the law.

Any person licensed by the Department of ABC, and his/her employees, must abide by all California laws. If the Department of ABC has evidence of a violation involving a licensee or a licensed premise, it will file an administrative complaint, called an accusation. An accusation, if proven, will lead to the suspension or revocation of the license. An accusation is in addition to, and not a substitute for, possible criminal and civil penalties that local city and district attorneys may bring against the licensee or employee who committed the violation.

Criminal penalties can result from violations that are criminal offenses. For example, the sale or service of alcoholic beverages to a minor, is not only grounds for an accusation, but constitutes a criminal offense. Thus, the seller could be arrested, charged with a crime, and face a fine, community service work or imprisonment in county jail.

Licensee penalties for sales to minors. Current law authorizes the Department of ABC to issue a 15-day suspension to a licensee for a first violation of provisions relating to the sale or furnishing of alcoholic beverages to a person under the age of 21. A second violation within 36 months may result in a 25-day suspension and a third violation within 36 months may result in license revocation.

Additionally, current law allows a licensee to pay a fine in lieu of serving the suspension. If the Department of ABC finds that public welfare and morals would not be impaired by the substitution of a fine for the actual suspension of the licensed business, the retail licensee may pay a sum of money equal to 50% of the estimated gross receipts from the sale of alcoholic beverages during the period of suspension, subject to various limits. However, a licensee may not petition the Department of ABC for an offer in compromise for a third or any subsequent violation that occurs within 36 months of the initial violation.

This bill would have no effect on the second or third violation, but rather would only apply to a first violation.

Existing training courses. Responsible Beverage Service (RBS) is a type of training that is offered to promote public safety and to reduce risks associated with the retail alcohol environment. RBS is not mandatory in California. AB 1221 (Gonzalez Fletcher, 2017), which is currently pending in the Assembly Governmental Organization, would require beginning July 1, 2021, an alcohol server, as defined, to successfully complete an RBS training course offered by the Department of ABC. However, some cities and counties do currently require RBS training to sell or serve alcoholic beverages at establishments within those jurisdictions. There are several public and private organizations that offer RBS training, including Department of ABC.

The Department of ABC offers a free and voluntary 4-hour class, called Licensee Education on Alcohol and Drugs, or LEAD, for retail licensees, their employees, and applicants. In 1991, the program began due to a grant from the California Office of Traffic Safety. The LEAD Program provides the licensee and applicant with practical information and instruction on checking various forms of identification, detecting and preventing illegal activity, and reducing liability.

At the conclusion of the class, an exam is given on the material that was covered. Each person that fulfills all of the training requirements receives a certificate, via email, certifying that they successfully completed a LEAD training course.

Staff comments. This bill would provide that it is the intent of the Legislature to establish a Responsible Retailer Course for retail licensees to encourage best practices to prevent the sale of alcoholic beverages to minors. However, the bill does not direct the Department of ABC to develop and offer such a course, nor does the Department of ABC currently offer a Responsible Retailer Course. The LEAD class would not meet the criteria of a Responsible Retailer Course, as specified in this bill. Additionally, it is unclear whether other existing RBS training programs would meet the criteria outlined in the bill to qualify as a Responsible Retailer Course.

This bill would authorize the Department of ABC to not aggregate a first violation of provisions relating to selling or furnishing alcoholic beverages to a person under 21 years of age, if the licensee, or agent or manager, agrees to complete a Responsible Retailer Course within six months of the date of settlement or final decision. The Committee may wish to consider whether or not the licensee or specified designee should have to complete the class within six months. There could be a situation where a licensee agrees to take the course, but does not actually complete the course.

Prior/Related Legislation

AB 1221 (Gonzalez Fletcher, 2017) would establish the RBS Training Program Act of 2017, beginning July 1, 2021, that requires an alcohol server, as defined, to successfully complete an RBS training course offered by the Department of ABC. (Pending in Assembly Governmental Organization Committee)

AB 2121 (Gonzalez, 2016) would have established the RBS Training Program Act of 2016, beginning July 1, 2020, that requires an alcohol server, as defined, to successfully complete an RBS training course from an accredited training provider within three months of employment and every three years thereafter. (Vetoed by Governor Brown)

SB 1102 (Budget and Fiscal Review Committee, Chapter 227, Statutes of 2004) among other things, authorized an alcoholic beverage licensee to petition the Department of ABC for an offer in compromise for a second violation of provisions relating to selling or furnishing alcoholic beverages to minors that occurs within 36 months of the initial violation.

AB 2715 (Hollingsworth, 2002) would have authorized alcoholic beverage licensees to petition the Department of ABC for a training program in lieu of, or to mitigate, a proposed license suspension or fine. (Failed passage in Assembly Governmental Organization Committee)

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT:

Various individuals

OPPOSITION:

Alcohol Justice

ARGUMENTS IN OPPOSITION: Alcohol Justice states that, “While education for responsible retailing is important, it should be a license requirement.”