AB342 - Alcoholic beverages: hours of sale: hospitality zones.

Amended IN Senate July 01, 2025 Amended IN Assembly May 23, 2025 Amended IN Assembly April 29, 2025 Amended IN Assembly March 28, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 342 Introduced by Assembly Member Haney (Principal coauthor: Assembly Member Mark González) (Principal coauthor: Senator Wiener) (Coauthors: Assembly Members Elhawary, Solache, and Wallis) January 28, 2025 An act to amend Section 25631 of, and to add and repeal Section 25634 of, the Business and Professions Code, relating to alcoholic beverages. LEGISLATIVE COUNSEL'S DIGEST AB 342, as amended, Haney. Alcoholic beverages: hours of sale: hospitality zones. Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application for, and the issuance and suspension of, alcoholic beverage licenses. Existing law requires moneys collected as fees pursuant to the act to be deposited in the Alcohol Beverage Control Fund, with those moneys generally allocated to the Department of Alcoholic Beverage Control upon appropriation by the Legislature. Existing law makes it a misdemeanor for any on- or off-sale licensee, or agent or employee of the licensee, to sell, give, or deliver to any person any alcoholic beverage between the hours of 2 a.m. and 6 a.m. of the same day, and for any person who knowingly purchases any alcoholic beverages between those hours. This bill, beginning June 1, 2026, would allow an on-sale licensee, or their agent or employee, to sell or give alcoholic beverages until 4 a.m. on Fridays, Saturdays, or specified state holidays within a hospitality zone, defined to include a Hospitality Zone and a Special Event Hospitality Zone established pursuant to the bill’s provisions, as specified. The bill, beginning June 1, 2026, bill would authorize the department to issue issue, following the adoption of rules and regulations and the satisfaction of any conditions for issuance, as specified, an additional serving hours license that authorizes an on-sale licensee, or their agent or employee, to sell or give alcoholic beverages within the timeframes described above in a hospitality zone, as specified. The bill would authorize an additional service hours license to be used by a licensed premises in a Hospitality Zone if a local governing body, as defined, of the city or county, as applicable, in which the licensed premises is located adopts an ordinance that meets certain requirements, as specified, and submits the ordinance to the department. The bill would also require, before the adoption of that ordinance, local law enforcement to present to the local governing body a late night policing plan that includes specified components, including, among other things, an analysis on the potential impact of creating a hospitality zone on public safety. The bill would authorize an additional service hours license to also be used by a licensed premises in a Special Event Hospitality Zone if a local governing body of the city or county, as applicable, in which the licensed premises is located adopts an ordinance that meets certain requirements and submits the ordinance to the department. The bill would require the ordinance to identify a Special Event Hospitality Zone in which an on-sale licensed premises would be eligible for an additional serving hours license, as specified, or to authorize at least one local department or other local entity to identify Special Event Hospitality Zones in which an on-sale licensed premises would be eligible for an additional serving hours license. The bill would require the local governing body, or the local department or other local entity authorized by the local governing body, to identify a Special Event Hospitality Zone in which an on-sale licensed premises would be eligible for an additional serving hours license subject to certain requirements, including that the local governing body, or the local department or other local entity authorized by the local governing body, draws or otherwise identifies on a map of the local area the boundary of each Special Event Hospitality Zone as specified, and identifies the duration in which each Special Event Hospitality Zone is operative, as specified. The bill, beginning January 1, 2026, would authorize a local governing body to comply with the above-described requirements and submit an ordinance described above to the department. The bill would also authorize the department to review those ordinances. The bill, beginning January June 1, 2026, and subject to the department receiving an applicable ordinance described above, would authorize an on-sale licensee to apply for an additional serving hours license. In this regard, the bill would require an applicant for an additional serving hours license to pay a $2,500 fee at the time of application and specify that the fee for an original and annual additional serving hours license is $2,500, and would require these fees to be deposited into the Alcohol Beverage Control Fund. The bill would require the $2,500 fees to be adjusted annually by the department for inflation based on changes to the California Consumer Price Index for All Urban Consumers. The bill would would, among other things, prohibit an on-sale licensee from exercising off-sale privileges during the additional serving hours permitted pursuant to an additional serving hours license and specify that an additional serving hours license is not transferrable between on-sale licensed premises. The bill would authorize a local governing body to charge an additional serving hours licensee a fee to fund local law enforcement. The bill would require the department, upon receipt of an application by an on-sale licensee for an additional serving hours license, to make a thorough investigation. The bill would require the applicant to notify law enforcement and residents, who may then file with the department protests and requests for a hearing, as specified. The bill would make it a misdemeanor for any person under 21 years of age to enter and remain in licensed premises during the additional service hours period without lawful business therein punishable by a fine of not less than $200. By creating a new crime, the bill would impose a state-mandated local program. The bill would require the department to adopt rules and regulations to enforce these provisions. The bill would require a city or county, as applicable, that by ordinance identifies, or authorizes a local department or other local entity to identify, a hospitality zone to provide the Legislature an annual report on its impact, as specified. The bill would require the Department of the California Highway Patrol, on or before January 1, 2029, to provide to the Legislature a report on the regional impact of the hospitality zones, as specified, and would authorize regional entities, including law enforcement, to provide information to that department on the impact that the hospitality zones had in their jurisdiction, as specified. The bill would repeal its provisions on January 1, 2031. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 25631 of the Business and Professions Code is amended to read: 25631. (a) (1) An on- or off-sale licensee, who does not hold an additional serving hours license pursuant to Section 25634, or agent or employee of that licensee, who sells, gives, or delivers to any persons any alcoholic beverage or any person who knowingly purchases any alcoholic beverage between the hours of 2 a.m. and 6 a.m. of the same day, is guilty of a misdemeanor. (2) For the purposes of this subdivision, on the day that a time change occurs from Pacific standard time to Pacific daylight saving time, or back again to Pacific standard time, “2 a.m.” means two hours after midnight of the day before the day that the change occurs. (b) (1) Beginning on June 1, 2026, an on-sale licensee who holds an additional serving hours license pursuant to Section 25634, or agent or employee of the licensee, who sells or gives to any person any alcoholic beverage or any person who knowingly purchases any alcoholic beverage on any day that is declared by the Governor to be an official state holiday or is a holiday listed on the Department of Human Resources internet website, or on any other Friday or Saturday, between the hours of 4 a.m. and 6 a.m. of the same day, in a hospitality zone determined pursuant to Section 25634, is guilty of a misdemeanor. (2) For the purpose of this subdivision, both of the following definitions apply: (A) On the day that a time change occurs from Pacific standard time to Pacific daylight saving time, or back again to Pacific standard time, “4 a.m.” means four hours after 12 a.m. of the day before the day that the change occurs. (B) “Hospitality zone” has the same meaning as that term is defined in Section 25634. SEC. 2. Section 25634 is added to the Business and Professions Code, to read: 25634. (a) For purposes of this section, both of the following definitions apply: (1) (A) “Hospitality zone” means an area that has a high concentration of business activity and serves as a tourism attraction. (B) “Hospitality zone” includes a Hospitality Zone established pursuant to subdivision (c) and a Special Event Hospitality Zone established pursuant to subdivision (e). (2) “Local governing body” means the city council or the board of supervisors, as may be applicable, of a city or county. (b) Beginning on June 1, 2026, Following the department’s adoption of rules and regulations pursuant to subdivision (m), and the satisfaction of any conditions for issuance set forth in this section, the department may issue an additional serving hours license that, notwithstanding subdivision (a) of Section 25631, authorizes, with or without conditions, the selling, giving, or purchasing of alcoholic beverages at an individual on-sale licensed premises on any day that is declared by the Governor to be an official state holiday or is a holiday listed on the Department of Human Resources internet website, and on every other Friday or Saturday, between the hours of 2 a.m. and 4 a.m., in a hospitality zone determined pursuant to this section. (c) (1) An additional serving hours license described in subdivision (b) may be used by a licensed premises in a Hospitality Zone if a local governing body of the city or county, as applicable, in which the licensed premises is located adopts an ordinance that meets the requirements of subdivision (d) and submits that ordinance to the department. (2) Before the local governing body adopts the ordinance specified in paragraph (1), local law enforcement shall present to the local governing body a late night policing plan that includes all of the following components: (A) A targeted deployment schedule. (B) A description on the necessary staffing numbers based on the time of night. (C) Relevant crime statistics. (D) An analysis on the potential impact of creating a hospitality zone on public safety. (E) A recommendation on whether a hospitality zone should be created. (d) The ordinance specified in subdivision (c) shall do both of the following: (1) Indicate that the city or county, as applicable, will allow additional serving hours licenses in any Hospitality Zones determined by the local governing body. (2) Identify the Hospitality Zones in which an on-sale licensed premises would be eligible for an additional serving hours license as follows: (A) (i) The local governing body shall draw or otherwise identify on a map of the local area the boundary of each Hospitality Zone, which may or may not include the entire city or county, and include a description of each zone. (ii) The local governing body in drawing or otherwise identifying each Hospitality Zone shall consider all of the following: (I) The cultural, historic, and economic appropriateness of the zone. (II) A study conducted, and a report provided, by the local governing body on the safety and transportation availability of the zone. (III) Means to increase the local governing body’s safety plan. (IV) The walkability of the zone. (V) The proximity of the zone to hotels and major arenas and convention centers. (B) The local governing body shall consider and identify the area that will be affected by the additional serving hours and demonstrates how that area will benefit from the additional serving hours. (C) The local governing body shall consider all of the following: (i) An assessment by the local governing body, prepared in consultation with local law enforcement, regarding the potential impact of the additional serving hours area and the public safety plan, created in consultation with local law enforcement, for managing those impacts that has been approved by the local governing body. The assessment shall include crime statistics, data derived from police reports, emergency medical response data, sanitation reports, and public health reports related to the additional serving hours area. (ii) An assessment by the local governing body on the impact of the local law enforcement budget and feasibility of increasing the budget within the Hospitality Zone. (iii) An assessment by the local governing body, prepared in consultation with the county transportation authority, regarding the potential impact of an additional serving hours area and a transportation plan, prepared in consultation with the county transportation authority, for managing transportation impacts that has been approved by the local governing body. (iv) Whether funding has been identified to carry out the local transportation agency’s transportation plan. (v) Whether transportation services are readily accessible in the additional serving hours area during the additional serving hours. (vi) Programs to increase public awareness of the transportation services available in the additional serving hours area. (D) The local governing body shall set a maximum number of additional serving hours licenses permitted in each hospitality zone. The total number of licenses across all hospitality zones shall not exceed one license for every 6,000 residents in the city or county, based on population numbers determined by the most recent federal decennial census. (e) (1) An additional serving hours license described in subdivision (b) may be used by a licensed premises in a Special Event Hospitality Zone if a local governing body of the city or county, as applicable, in which the licensed premises is located adopts an ordinance that indicates that the city or county, as [Text truncated for display. Full text available on Congress.gov.]