New Legislation Authorizes Fine for Second Strike Sale to Minor
October 11, 2004
Michael Brill Newman - San Francisco
In August, 2004, Governor Schwarzenegger signed
legislation amending the ABC Act to allow payment of a fine in lieu of
suspension for a “second strike” sale to a minor. As “urgency” legislation, the
new law went into effect immediately, affecting pending and future ABC
disciplinary actions for sales to minors.
Prior to the new law, a vendor could pay a fine
on its first offense, but automatically had to serve a twenty-five-day
suspension of its license for a second offense within any thirty-six-month
period. Now, a licensee may petition the ABC to make an offer in compromise and
pay a fine instead. (The “three strikes” law for sales to minors provides for a
fifteen-day suspension on a first offense, a twenty-five-day suspension of the
license on a second offense, and revocation of a license on a third offense
within any thirty-six-month period.) Of course, the ABC retains discretion on
accepting an offer in compromise in lieu of the 25-day suspension. It now,
however, must follow newly-adopted and recently published penalty guidelines
established by emergency rulemaking in April, 2004. (See my column in the June
2004 issue of CBN.)
Previously, for any violation of the ABC Act, a
licensee could petition the ABC for an offer in compromise and fine only for
suspensions of 15 days or less. The new legislation creates a special exception
for the sale to minor offense only. The amount of the fine for a second offense
will be determined by law by a calculation of fifty percent of the daily gross
sales of alcoholic beverages multiplied by the number of days of suspension,
subject to a minimum of $2,500 and a maximum of $20,000. The result of a “third
strike” offense, however, remains unchanged: revocation.
The new law appears to be a win-win for both the
industry and the ABC. For affected licensees, it will allow greater flexibility
in giving licensees the option of staying open and paying potentially a steep
fine or closing its doors for 25 days. For the ABC, the changes will likely
reduce challenges to sales to minors violations but at the same time
significantly increase fine revenues without lessening the deterrent effect of
the “three strikes” law.
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