AB 828: New Neighborhood-Restricted Full Liquor Licenses for Los Angeles County Restaurants

Updated November 8, 2026. This article was first written in mid-November 2025, a month after Governor Newsom signed AB 828 and before it took effect on January 1, 2026. It describes the law as enacted then. Later developments are kept separate in the “Current context” section near the end. It is general information, not legal advice.

A full bar license that cannot be flipped

For a small restaurant in Los Angeles County, adding cocktails to the menu usually means buying an existing on-sale general license on the open market. Because California limits the number of those licenses by county population, an existing license can cost far more than the state’s own application fee. That gap keeps many neighborhood restaurants serving only beer and wine.

Assembly Bill 828 (Mark González, Chapter 715, Statutes of 2025) takes a targeted approach. Approved by the Governor on October 13, 2025, it adds Business and Professions Code section 23826.24, which authorizes ABC to issue new “neighborhood-restricted special on-sale general licenses” to bona fide public eating places in a defined list of Los Angeles County census tracts. These licenses carry the privileges of a restaurant full liquor license, but they come with strict limits on where they can go and what they can be sold for.

How many, and how fast

Section 23826.24(a) caps the program in two ways. ABC may issue no more than 12 new original licenses per year, beginning January 1, 2026, until a total of 40 have been issued under the section. After a license is canceled or revoked, subdivision (f) allows ABC to issue one additional license using the same procedure, so the total in circulation can be maintained over time.

There is also a concurrency limit. Subdivision (b) groups the eligible census tracts into three lists, which the statute treats as three neighborhoods. In each group, no more than 20 neighborhood-restricted licenses may be held at premises within those tracts at the same time.

Who can qualify

Eligibility turns on the premises and on the applicant’s history with that premises.

Location. The premises must be in one of the census tracts listed in subdivision (b), using the tract numbers from the 2020 U.S. Census. The statute does not name neighborhoods. It lists tract numbers, and those are what count. A restaurant owner who believes their address qualifies should confirm its 2020 census tract number using official census tools and then confirm with ABC.

Type of business. The license is only for bona fide public eating places, and subdivision (d)(2) says the application is subject to all the requirements that apply to an on-sale general license for a bona fide eating place. In other words, this is a license for restaurants that meet ABC’s meal service standards, not for bars.

No recent full license at the same premises. Under subdivision (d)(1), a person is not eligible for that premises if they currently hold an on-sale general license there, hold any interest in one there, or held such a license or interest there within 12 months before the date of the drawing.

Existing on-sale licenses canceled. Subdivision (c) says a license may not be issued until any existing on-sale licenses issued to the applicant for the same premises are canceled. A restaurant moving up from a beer and wine license would give up that license when the new one issues.

The drawing process

Subdivision (c) requires ABC to follow the procedure in section 23961 when issuing these licenses. That is the same priority drawing process ABC uses when new licenses become available in a county and more people apply than there are licenses. Our article on ABC’s new license authorizations and priority drawings explains how those drawings generally work, from filing an application to being assigned a priority number.

Because of the annual cap, interested restaurants should expect a selection process, not first-come, first-served issuance. Watching ABC’s announcements for the opening of the filing period is the practical first step.

The restrictions that make this license different

The trade-off for a lower-cost path to a full license is that the license is tied to its neighborhood and cannot be treated as a speculative asset.

• No transfers between counties. Subdivision (e)(1).
• No transfers to other premises, with two exceptions. If the premises are destroyed by fire, an act of God, or another force beyond the licensee’s control, the rules in section 24081 apply. And ABC may allow a transfer within the same neighborhood group of tracts. Subdivision (e)(2) to (4).
• Price cap. A license issued under this section may not be sold or transferred for a price greater than the original fee paid by the seller or transferor. Subdivision (e)(5).
• No exchange for a bar license. A holder may not exchange the license for an on-sale license for public premises. Subdivision (g).

Otherwise, subdivision (h) provides that the license may exercise all the privileges, and is subject to all the restrictions, of an on-sale general license for a bona fide eating place. ABC may designate the licenses as on-sale general for special use without changing those privileges, and may adopt regulations to enforce the section.

What the price cap means for buyers and sellers

For a restaurant buying a business that holds one of these licenses, the price cap changes the economics of the deal. The license itself cannot be sold for more than the original fee. That does not prevent a sale of the business’s other assets, but buyers, sellers, brokers, and escrow holders should all understand that the license component is capped and that ABC will review the transfer. Our guide to buying a bar and ABC license transfers covers how escrow and ABC approval work generally.

Is a full license right for your restaurant?

Adding spirits changes more than the menu. Before applying, consider:

• Operations. A full bar requires inventory controls, recipes, pour standards, and trained bartenders.
• Meal service. As a bona fide eating place license, the restaurant must continue to operate as a genuine restaurant with real meal service.
• Insurance. Liquor liability coverage typically changes when spirits are added.
• Neighborhood relations. New licenses can draw public comment and protests. Talking with neighbors and local officials early, before filing, can often help.
• Local approvals. City or county conditional use permits may also be required for a new full license.
• Training. Spirits make it easier for guests to reach intoxication quickly. Every server and manager needs current responsible beverage service certification, and house policies on pour sizes and refusals should be in writing.

Part of a broader pattern

AB 828 is one of several 2025 bills that authorize additional on-sale general licenses in specific places, each with its own conditions. AB 445, for example, authorizes up to 10 additional licenses for bona fide public eating places in Colusa County, with similar prohibitions on transfers out of the county and on sales above the original fee. The approach reflects a policy choice: add licenses in targeted areas without flooding the general market or creating new assets for speculation.

A preparation checklist

1. Confirm your premises’ 2020 census tract number and compare it with the lists in section 23826.24(b).
2. Check whether you, or anyone with an interest in your business, has held an on-sale general license at that premises in the last 12 months.
3. Review whether your operation meets bona fide eating place requirements today.
4. Talk with your ABC district office about timing and required forms.
5. Check local zoning and permit requirements for a full license.
6. Plan bar operations, staffing, and training before the license issues, not after.

Common questions

Can a bar apply? No. The license is limited to bona fide public eating places, and the application must meet all the requirements for an on-sale general license for a bona fide eating place.

Can we sell the license later at market value? No. A license issued under this section may not be sold or transferred for more than the original fee paid by the seller or transferor.

Can we move to a bigger space across town? Generally no. Transfers to other premises are prohibited, except within the same neighborhood group of tracts with ABC’s permission, or after destruction of the premises by fire or another force beyond the licensee’s control.

We have a beer and wine license now. Can we keep it? Not at the same premises. The new license cannot be issued until existing on-sale licenses issued to the applicant for that premises are canceled.

How many licenses will be available in 2026? The statute allows up to 12 per year beginning January 1, 2026. How many actually issue depends on applications and ABC’s process.

Where do we find our census tract? Use official U.S. Census Bureau tools with your premises address, then confirm eligibility with ABC before filing.

Staffing up for spirits

Restaurants moving from beer and wine to a full bar often underestimate the training gap. Bartenders need to understand standard drink sizes, how quickly mixed drinks can raise blood alcohol, and how to slow or stop service without confrontation. Servers need to recognize the signs of intoxication earlier, because cocktails can move a guest from fine to impaired faster than beer. Managers need written policies on pour sizes, double shots, and refusals, and they need to back staff who follow them.

Building those policies before the license issues gives the team time to practice. A soft launch with a short cocktail list, careful pours, and close manager attention is safer than opening a full bar program on a busy weekend.

Current context as of November 8, 2026

ABC’s 2025 Chaptered Legislation summary lists AB 828 as effective January 1, 2026 and describes it as authorizing up to 40 new original type 87 licenses in qualifying Los Angeles County census tracts, no more than 12 per year. ABC’s news release page later announced that its annual priority license drawings were scheduled for the week of October 26, 2026. Restaurants interested in these licenses should check ABC directly for current filing periods and results.

The bottom line

AB 828 opens a limited, carefully fenced path to a full restaurant liquor license in specific Los Angeles County neighborhoods. It is not a windfall to resell. For the right restaurant, it can be a way to add cocktails without paying open-market prices, as long as the business is ready to serve spirits responsibly.

Sources

1. California Legislature: AB 828 (Mark González, Chapter 715, Statutes of 2025), chaptered text
2. California Legislature: AB 445 (Aguiar-Curry, Chapter 153, Statutes of 2025), chaptered text
3. ABC: 2025 Chaptered Legislation (current note)
4. ABC: News Releases (current note)

This article is general information, not legal advice.