Booze bill bombs
Governor vetoes locally crafted legislation to control liquor stores in blighted areas
Sacramento Democratic Assemblyman Dave Jones worked eight months crafting legislation to grant local governments more control over where liquor licenses are issued in blighted areas. After a hard-fought battle, the Legislature approved the bill in August. But before Jones could celebrate, Gov. Arnold Schwarzenegger vetoed the legislation late last month, saying it infringed on the California Department of Alcoholic Beverage Control’s constitutional authority.
Jones is livid.
“I am very disappointed that the governor chose to turn his back on neighborhoods and small-business owners who are fighting problem liquor stores,” he said. “The Constitution is very clear that the Legislature can legislate the ABC, and that’s all this bill sought to do in a very modest and common-sense way.”
The bill got its genesis locally when the Sacramento Housing and Redevelopment Agency closed down and demolished two liquor stores in Oak Park. SHRA officials were surprised to learn that the liquor licenses didn’t die with the stores. In fact, the ABC is permitted by law to reissue the licenses to any store that meets the state’s qualifications—even a store in the same blighted neighborhood.
The same went for the Liquor Tree liquor store located within the Valley Hi shopping center in south Sacramento, which had become the frequent target of complaints by surrounding business owners. The store had been caught and cited selling alcohol to minors at least once, according to ABC records. Tony Solomon, who owns a veterinarian clinic nearby, said he once witnessed a fatal shooting in front of his business, following a conflict between parties that were regularly seen in front of the Liquor Tree.
“There’s a lot of students they have roaming around the store because they are selling cheap liquor,” Solomon said. “There [was] a lot of police response there.”
As in Oak Park, the city eventually forced Liquor Tree to shut down. But as in Oak Park, the liquor license didn’t go away.
“After [the SHRA] bought it, they discovered to their horror that the license could not be retired,” Jones said. “Nor could they hold that license. Instead it had to be returned to ABC, and ABC could issue that license right back to a location in that area.”
So Jones drafted what he called a “common sense” bill, giving local governments more control over liquor-license issuances in blighted areas. After months of negotiating and heavy lobbying, the bill was pared down until it was eventually accepted by alcohol-industry groups. But there was one major obstacle left—the ABC itself.
The statewide regulatory agency was concerned the bill would infringe upon its constitutional authority, said Assembly Judiciary Committee staff member Tom Clark, who helped negotiate the bill.
“Their main concern is the state Constitution gives the ABC exclusive rights to issue the licenses,” Clark said. “Our counterargument to that is the state Constitution says that ABC authority is subject to whatever restrictions the Legislature imposes. [The bill] still leaves a great deal of discretion with the ABC.”
Jones said he consulted with legislative counsel and was assured the bill was constitutional. The bill eventually passed in August.
But it wasn’t over yet.
The ABC asked its parent authority, the Business, Transportation and Housing Agency, to recommend the governor veto the bill, which he did.
“This bill would cede a portion of the state’s oversight of off-sale retail licensees to local entities,” Gov. Schwarzenegger wrote in his veto statement. “While I support the intent of the bill to strengthen redevelopment efforts in blighted areas, I cannot support legislation which contradicts the provision of the California Constitution vesting the State with the exclusive right to license and regulate alcoholic beverage retailers.”
Chris Albrecht, legislative director for the ABC, defended his agency’s veto recommendation.
“We did have concerns with regard to the language that gave some of the licensing authority to local governments,” Albrecht said. “We do work very closely with local communities.”
Albrecht said transferring a license isn’t as easy as the bill’s supporters made it out to be, adding that the liquor-store owners in question probably wouldn’t have been able to transfer their licenses within the area anyways. For example, the Liquor Tree’s former license is pending transfer to a CVS Pharmacy in Rancho Cordova.
“I would say it would have been very unlikely,” Albrecht said. “The perceived loophole that was thought to exist was never realized.”
In addition, Albrecht said the bill was unnecessary because the ABC already has in place strict guidelines over to whom they grant licenses, which are passed out every year under close scrutiny.
Jones disagrees, but said he has no plans to reintroduce a similar bill while Schwarzenegger remains in office.