Notice of Third Modification to Text of Proposed Regulations

Pursuant to the requirements of Government Code section 11346.8(c), and section 44 of Title 1 of the California Code of Regulations, the Department of Alcoholic Beverage Control is providing notice of changes that have been made to the text of the proposed addition of Title 4 of the California Code of Regulations Title 4 section 70.

The proposal to update California Code of Regulations Title 4 section 70 was originally noticed to the public on September 16, 2022. The proposed regulation had a 45-day comment period that ended at 5 p.m. on November 1, 2022. A public hearing was also held on November 1, 2022. A second 45-day comment period was noticed on January 25, 2023, and ended at 12 p.m. March 13, 2023. A 15-day comment period was noticed on May 5, 2023, and ended at 12 p.m. May 22, 2023. The proposed regulations were submitted to the Office of Administrative Law (OAL) for review and final approval. OAL disapproved the proposed regulatory text due to a lack of clarity in several sections on July 26, 2023. The department has again modified the proposed regulatory text in response to the disapproval given by OAL. Specifically, the Department of Alcoholic Beverage Control (ABC) has made the following changes to the proposed regulations:

1. An updated Informative Digest (included below) that will be added to the Final Statement of Reasons clarifying the Summary of Existing Laws and Regulations and the Summary of Effect of the proposed regulation. This update more clearly states that the proposed regulations will apply to any application, whether new or to expand an existing licensed premises, containing a proposed non-contiguous area.
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   Updated Summary of Existing Laws and Regulations
   During the COVID-19 pandemic, ABC instituted a regulatory relief notice that allowed licensees who sell alcohol to consumers for consumption on the licensed premises to obtain a COVID-19 Temporary Catering Authorization (TCA). The TCAs allowed expansions of licensed premises to limit the spread of COVID-19 while allowing licensees to remain open for business. These expansions were done without ABC investigation, but also could be revoked through complaints or objection by local law enforcement without a formal administrative hearing process. This led to licensees seeking a large amount of premises expansions through the TCA program in a short amount of time, some of them non-contiguous to the licensed premises. Pursuant to AB 61 (Gabriel, Chapter 651, Statutes of 2021) and SB 314 (Wiener, Chapter 656, Statutes of 2021), the Legislature temporarily continued the TCA program by referring to the Fourth Notice of Regulatory Relief implemented by ABC within Business and Professions Code section 25750.5.
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   In the past, ABC issued some non-contiguous expanded premises on a limited case-by-case basis while making sure each one was not a danger to the public health, safety, or welfare. ABC anticipates many requests for permanent extensions of licensed premises for non-contiguous areas due to the large influx of temporary non-contiguous premises expansions pursuant to the new law.
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   It is necessary for ABC to establish a standard policy for permanent non-contiguous licensed premises away from the main licensed premises to protect the public health, safety, and welfare.
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   Updated Summary of Effect
   The proposed regulations seek to formally implement standards ABC has used on a case-by-case basis for the approval of non-contiguous licensed premises whether as a part of an initial application or an application for an expansion of an existing licensed premises.
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   The regulatory package was created in response to the influx of non-contiguous COVID-19 Temporary Catering Authorizations (TCA) requested pursuant to the Fourth Notice of Regulatory Relief instituted by ABC in response to the COVID-19 state of emergency, and the Legislature’s subsequent codification of the program in Business and Professions Code section 25750.5. ABC anticipates many licensees will seek to make their non-contiguous TCA’s permanent prior to when they expire pursuant to Business and Professions Code section 25750.5. However, this proposed regulatory package has no effect upon the currently operable TCAs instituted by the Legislature that are set to expire pursuant to Business and Professions Code section 25750.5.
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   The regulatory package will notify the public, ABC licensees, local governments, and local law enforcement agencies of the standards that ABC will apply when approving permanent non-contiguous licensed areas for use by licensees whether as a part of an initial application or an application for an expansion of an existing licensed premises.
2. Changing for clarification and consistency all mentions of the “main licensed area” to the same wording within the proposed regulation.
3. Clarifying the term “reasonable proximity” as used in the proposed regulatory text for the required distance between the main licensed premises and a non-contiguous license premises attached thereto.
4. Clarifying further the definition of “non-contiguous area” to better conform with the many prior changes to the nature of a non-contiguous area through the regulatory process.
5. Clarifying the term “liberally applied” within the definition of open and operating as established within the proposed regulation.
6. Clarifying the definitions of “actively monitored” to ensure they are consistent with the rest of the proposed text, as this definition changed multiple times over the course of the regulatory action. This change was also made to ensure the safety of the public in and around a non-contiguous area serving alcoholic beverages.
7. Clarifying when a licensee must continually staff an approved bar or dispensing point that is placed within a non-contiguous area, and more clearly defining what an “unsecured alcoholic beverage” is.
8. Clarifying how an approved bar or dispensing point must operate to ensure a non-contiguous area is not operating independently from the main licensed area.
9. Clarifying the authority and process of ABC placing conditions upon either the non-contiguous area, the main licensed area, or both during ABC’s investigation and approval process for an application containing a non-contiguous licensed area.
10. Clarifying the definition of “function independently” to ensure licensees know how a non-contiguous area must function in relation to the main licensed premises. This ensures that non-contiguous areas are not used to obtain a second location without a full license, especially with license types restricted by law for a specific amount pursuant to the population of a county.
11. Clarifying notice requirements for residents and owners of real property within 500 feet are measured from both the main licensed area and the non-contiguous area for purposes of determining who needs to receive the required notice.
12. Clarifying the requirement that the main licensed premises must alone satisfy all requirements, such as maintaining facilities or equipment, for their license type as established by law. The non-contiguous area cannot be used to satisfy further requirements of a license type.
13. Clarifying that nothing in the proposed regulation permits a licensee to exercise any privileges, or engage in any activities, in the non-contiguous area that are not authorized by the license issued.
14. Adding to the Authority and References sections of law that pertain to ABC’s normal application process, conditions process, sections explaining licensed privileges of various on-premises consumption license types, the statutory fee authorization for premises expansion applications, and the authority of ABC to regulate in all these areas pursuant to law and the California Constitution.

The necessity of each of these changes will be explained in the Final Statement of Reasons to be submitted at the close of this rulemaking record and the Response to Comments attached thereto.

A copy of the full text of the regulation with the proposed changes indicated is attached for your review. Text to be removed from the proposed regulation by the first modification is in strikethrough. Text to be added to the proposed regulation by the first modification is in underlined italics. Text to be added to the proposed regulation by the second modification is in bold italics. Text to be removed from the proposed regulation by the third modification is in underlined italic strikethrough. Text to be added to the proposed regulation by the third modification is in underlined bold.

Any interested person may submit a written statement relating to the text modified by the third modification during the public comment period from September 14, 2023, to October 30, 2023. The written comment period will close at 12 p.m. on October 30, 2023. Submit written comments to:

The Department of Alcoholic Beverage Control
3927 Lennane Drive, Suite 100
Sacramento, CA 95834

Attention: Law and Policy Unit

Comments may also be submitted by email to rpu@abc.ca.gov.

All written comments received by the Department of Alcoholic Beverage Control by 12 p.m. on October 30, 2023, which pertain to the indicated changes, will be reviewed and responded to by the department’s staff as part of the compilation of the rulemaking file. Please limit your comments to the proposed modifications to the text from the third modification which will appear in underlined italic strikethrough or in underlined bold.

Inquiries concerning the proposed regulatory action may be directed to the agency representative Robert de Ruyter, Assistant General Counsel, (916) 419-8958, or (designated backup contact) Sarah Easter, Associate Governmental Program Analyst, Law and Policy Unit, (916) 823-1310 or via email at rpu@abc.ca.gov.