ABC-522 Instructions

Introduction

Business and Professions Code (BPC) § 23826.13 authorizes the department to issue up to five (5) new original neighborhood-restricted special on-sale general licenses each year until a total of thirty (30) new licenses authorized by this section are issued in the specified census tracts located in the city and county of San Francisco. In issuing these licenses, the statute requires that the department utilize its established procedures for issuing original general licenses, as set forth in BPC § 23961. Neighborhood-restricted special on-sale general licenses are required to be operated as bona fide eating places in compliance with BPC § 23038 but are restricted from any off-sale privileges. In addition, neighborhood-restricted special on-sale general licenses are generally non-transferrable to any other entity or to another location outside the census tracts listed in paragraphs (1) to (7) of subdivision (b) of BPC § 23826.13.

The census tracts listed in subdivisions (b)(1), (b)(3), (b)(4) and (b)(6) of BPC § 23826.13 are currently full and the department will not be accepting applications for those neighborhoods. Additionally, if more applications are received for a neighborhood than the number of licenses available, the applicants will be placed in a random drawing to determine the order in which applications will be processed for that neighborhood.

Application Filing Period

During the period of September 9, 2024, through September 20, 2024, ABC offices will accept applications for new original neighborhood-restricted special on-sale general licenses in San Francisco County.

Application Fees: $18,635

The priority application fee must be paid by certified check, cashier’s check, or money order only. Additional fees (i.e., fingerprint, annual fees, etc.) are to be collected at the time of filing the formal application.

Unsuccessful drawing participants or those who withdraw their interest in a priority license prior to the drawing or prior to filing a formal application, may request a full refund, minus a $100 service charge.

Refunds will be made payable to the applicant(s) listed on the priority application form submitted to the department.

Successful participants who withdraw their interest after filing a formal application for a priority license will be entitled to a refund in accordance with Business and Professions Code (BPC) § 23320 and 23959. Pursuant to the provisions of § 12419.5 of the Government Code, if an applicant owes money to California taxing agencies, a claim against the priority application fee may be made by the taxing agency. If such a claim is made, the amount owed will be deducted from the priority application fee at the time of refund and remitted to the taxing agency.

Name(s) on Application

The application for a priority license must include the names of all persons or entities who have an ownership interest in the priority application or in the business to be licensed per § 69.2., of Chapter 1, Title 4, of the California Code of Regulations. Failure to list all persons/entities is grounds for disqualification and loss of priority status.

Any priority license application received by ABC that is incomplete or untimely shall be disqualified.

Residency

To be eligible to participate in a drawing for a neighborhood-restricted on-sale general license, an applicant must have been a resident of California for at least 90 days prior to the date of the drawing. If a drawing is necessary, an applicant for a priority license will be required to prove residency via submission of the below-described documents:

• Individuals — Proof of residency can be established via documents such as a California Driver’s License, utility bills, voter registration, etc.
• Partnerships — Each partner must provide proof of residency; see information under “Individuals”, above.
• Corporations — The 90-day residence begins with the date its Articles of Incorporation are filed with the Secretary of State. For out-of-state corporations, the 90-day residency begins with the date registered with the Secretary of State to do business in California.
• Limited Partnerships — The 90-day residency begins with the date the form LP-1 is filed with the Secretary of State. For out-of-state limited partnerships, the 90-day residency begins with the date registered with the Secretary of State to do business in California.
• Limited Liability Companies — The 90-day residency begins with the date the form LLC-1 is filed with the Secretary of State. For out-of-state limited liability companies, the 90-day residency begins with the date registered with the Secretary of State to do business in California.
• Trusts — Proof of residency can be established via documents such as a California Driver’s License, utility bills, voter registration, etc. of the trustee or other controlling person of the trust. If the trustee or other controlling person of the trust is a general partnership, limited partnership, corporation, non-profit, or limited liability company, proof of 90-day residency begins with the date registered with the Secretary of State.

Failure to provide proof of residency as described above will result in being disqualified from the priority licensing process.

Filing the Application

Applications may be filed in person by going to the ABC San Francisco District Office, located at 33 New
Montgomery Street, Suite 1230, San Francisco, CA 94105, or by mail to that address or any other ABC office. During the drawing period, ABC offices will be open Monday through Friday from 8 a.m. until 5 p.m. We encourage all applicants to submit their applications early.

Deadline

• In person: On Friday, September 20, 2024, only those applicants within the doors of an ABC office by 5 p.m. may file priority applications.
• By mail: Your envelope containing Items (1) through (2) below must be postmarked on or before Friday, September 20, 2024.

The following items are required:

1. Fee – certified check, cashier’s check, or money order, payable to Alcoholic Beverage Control.
2. Neighborhood-Restricted Special On-sale General License Application – To be completed in full by all applicants, including previously qualified ‘P-12’ licensees.
   • Simply noting “P12 licensee” under the officer/shareholder area will not be accepted.
   • P-12 licensees and current/active licensees are not exempt from thoroughly completing the application.
   • An incomplete application will result in disqualification from participating in the priority drawing.
   • The application requires a single signature from the applicant entity. In signing, the applicant agrees to comply with conditions and requirements unique to the neighborhood-restricted special on-sale general license application process.
   • Failure to comply with the conditions and requirements may result in automatic withdrawal of the application and cancellation of an applicant’s drawing position.

The ABC-522 form must be completed for every priority license application. If the applicant entity is not a sole owner, then you must also complete the appropriate attachment for your entity type in addition to your ABC-522 form.

• ABC-522-ATT-B (General Partnership) – For multiple individuals, multiple corporate entities, or a combination of the two, such as an individual partnering with a corporate entity, applying for a license.
• ABC-522-ATT-C (Limited Partnership) – For a limited partnership with general partners and limited partners applying for a license.
• ABC-522-ATT-D (Corporations and Non-Profits) – For a corporation with officers/directors and stockholders and non-profit organizations applying for a license.
• ABC-522-ATT-E (Limited Liability Company) – For a limited liability company with managers and/or members applying for a license.
• ABC-522-ATT-F (Trusts) – For a trust with all controlling individuals, trustees, and beneficiaries applying for a license.

Conditions and Restrictions

Applicant

No person or entity who files for a neighborhood-restricted special on-sale general license may have an interest in any other application for the same type of license.

• Applicants may not pool funds to file more than one priority application for the same type of license and transaction.
• A married couple may file only one neighborhood-restricted special on-sale general license application.
• No corporation, limited partnership or limited liability company may file a neighborhood-restricted special on-sale general license application if it holds the interest in another entity that has filed for the same type of license.
• If more than one corporation, limited partnership or limited liability company is a subsidiary of the same parent, only one may file a neighborhood-restricted special on-sale general license application.
• A person or entity who holds ownership interest in a neighborhood-restricted special on-sale general license applicant entity, or who is a principal (officer, director, LLC manager, general partner, etc.) of an applicant entity, may not hold interest in or be a principal of another applicant entity for the same type of license.

Each neighborhood-restricted special on-sale general license application must show the names of all persons having an interest in the license application and related business, including all:

• Partners
• General and limited partners of a Limited Partnership
• Corporate officers and directors
• Stockholders or prospective stockholders
• Limited liability company officers, managers, and members
• Controlling individuals, trustees, and beneficiaries of a Trust

Priority of Applicants

If the number of applicants is equal to or less than the number of neighborhood-restricted special on-sale general licenses available, all applicants will be notified that they have 90 days to complete a formal application for their specific premises in the identified, authorized census tracts.

If there are more applicants than neighborhood-restricted special on-sale general licenses available, a public drawing will be held; the time, date, and place of any drawing will be posted on the department’s website (www.abc.ca.gov). After the drawing is held, the department will notify each applicant by mail of their position in the drawing.

Successful Drawing Participants:

• A successful drawing participant is one whose priority position (number) is lower than the number of licenses available. These applicants will be notified that they have 90 days to complete a formal application for their specific premises in an identified, authorized census tract. Completion of all standard application forms for an original retail license is required.
• A successful applicant who holds an on-sale general license may not make formal application for a neighborhood-restricted special on-sale general license at the premises where that on-sale general license is held. Any existing on-sale license held at an applicant premises must be canceled upon issuance of a neighborhood-restricted special on-sale general license.
• Prior to submitting a formal application for a neighborhood-restricted special on-sale general license, a successful applicant must conduct at least one pre-application public meeting, at a location within one mile of the proposed premises, with neighbors and members of the community within the census tract in which the premises are located. At least 14 days prior to the pre-application meeting, the applicant must mail notification of the meeting to the Chief of Police of the San Francisco Police Department, to residents within a 500-foot radius of the proposed premises and to relevant neighborhood associations as identified by the city’s planning department.
• Form ABC-522-1, to include signed verification by the San Francisco Board of Supervisors, or their designee, that the applicant completed the required pre-application meeting requirements for the neighborhood-restricted special on-sale general license, is to be included at the time of submission of formal application for the license.
• Successful drawing participants who do not wish to proceed with filing a formal application may withdraw their interest and request a full refund, minus a $100 service charge. Once a formal application has been filed, the applicant will only be entitled to a refund in accordance with BPC § 23320 & 23959. (Also, see Application Fees [page 1] regarding claims by California taxing agencies).

Unsuccessful Drawing Participants:

• An unsuccessful drawing participant is one whose priority position (number) is higher than the number of licenses available.
• The neighborhood-restricted special on-sale general license application fee, minus a $100 service charge, will be refunded to each unsuccessful drawing participant. Refund checks will be mailed within 90-120 days of the priority drawing (See Application Fees [page 1] regarding claims by California taxing agencies).
• Unsuccessful drawing participants will maintain the priority position assigned to them at the drawing. In the event a successful applicant is disqualified or withdraws, the next drawing participant in order of position will be contacted and will have 30 days to repay the previously refunded priority application fee, and an additional 60 days to file a formal application.
• In order to maintain a priority position, unsuccessful drawing participants are encouraged to notify ABC of any change in mailing address that occurs while the drawing list is active.

Expiration of Priority: The numeric list of neighborhood-restricted special on-sale general license applicants who are not winners in the randomized ordering shall be retained by the department until the following year pursuant to Chapter 1, Title 4 of the California Code of Regulations (CCR) § 69.3 (c).

After Issuance of Neighborhood-Restricted Special On-Sale General Licenses

• Neighborhood-restricted special on-sale general licenses are restricted from being transferred to any other person or entity. Limited allowance for transfer of ownership of licensed entities exists via BPC § 24071, 24071.1, and 24071.2.
• Neighborhood-restricted special on-sale general licenses are restricted from being transferred to any other premises outside the specified census tracts listed in paragraphs (1) to (7) of subdivision (b) of BPC § 23826.13. There is an exception when the licensed premises have been destroyed by fire or any act of God or other force beyond the control of the licensee (see BPC § 24081). Additionally, neighborhood-restricted special on-sale general licenses are restricted from being transferred to any other county and from being exchanged for a public premises license.
• If a neighborhood-restricted special on-sale general license is canceled, the department is authorized to issue an additional neighborhood-restricted special on-sale general license pursuant to the above-described drawing and application procedures.

References

Article XX, Section 22 of the State Constitution and sections 23038, 23826.13, 23961, 24071, 24071.1, 24071.2 and 24081 of the California Business and Professions Code