BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 1260
Author: Yee (D), et al
Amended: 8/2/10
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 8-0, 4/13/10
AYES: Wright, Calderon, Denham, Florez, Oropeza, Padilla,
Price, Yee
NO VOTE RECORDED: Harman, Negrete McLeod, Wyland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 30-0, 5/10/10 (Consent)
AYES: Aanestad, Alquist, Ashburn, Calderon, Cedillo,
Cogdill, Correa, Cox, DeSaulnier, Ducheny, Florez,
Hancock, Hollingsworth, Huff, Kehoe, Leno, Lowenthal,
Negrete McLeod, Padilla, Pavley, Price, Romero, Runner,
Simitian, Steinberg, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Corbett, Denham, Dutton, Harman, Liu,
Oropeza, Strickland, Wiggins, Vacancy, Vacancy
ASSEMBLY FLOOR : 75-0, 8/17/10 - See last page for vote
SUBJECT : Alcoholic beverages: lodging establishments
SOURCE : California Hotel and Lodging Association
DIGEST : This bill amends an existing provision of the
Alcoholic Beverage Control Act to enable guests to purchase
beer and wine in sealed containers from hotel or motel gift
CONTINUED
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shops.
Assembly Amendments correct a drafting error.
ANALYSIS : Existing law establishes the Department of
Alcoholic Beverage Control (ABC) and grants it exclusive
authority to administer the provisions of the Alcoholic
Beverage Control Act in accordance with laws enacted by the
Legislature. This involves licensing individuals and
businesses associated with the manufacture, importation and
sale of alcoholic beverages in this state and the
collection of license fees or occupation taxes for this
purpose.
Existing law (Section 23355.2 of the Business and
Professions Code [BPC]) enacted in 1985, permits full
service hotels to offer alcoholic beverages for sale by
means of "mini bars" in guest rooms. This provision of law
was enacted in response to the introduction of mini bars in
hotels in other states and internationally.
Existing law (BPC Section 23396.1) establishes an on-sale
general license for "restricted service lodging
establishments" (e.g., Embassy Suites, Days Inn, Residence
Inns, etc.) that permits hotels and motels to sell or
furnish alcoholic beverages for consumption on the premises
by means of (1) controlled access alcoholic beverage
cabinets (mini bars) located in guestrooms or (2)
furnishing alcoholic beverages only to their transient
guests and their invitees under circumstances where the
cost of the alcoholic beverages is included in the price of
the overnight occupancy accommodation.
BPC Section 23396.1 provides that a hotel or motel licensed
pursuant to this section shall not sell or furnish
alcoholic beverages to the general public and shall not be
entitled to a caterer's permit. Such an establishment is
not permitted to operate a restaurant, it must have at
least 10 guestrooms, and it may not derive more than five
percent of its total gross annual revenues from sales of
alcoholic beverages. Such licensees are additionally
required to purchase all their alcoholic beverages from
licensed wholesalers or winegrowers and must pay an
application fee of $6,000 and an annual renewal fee, as
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specified.
Existing law (BPC Section 24045.11) permits the Department
of ABC to issue a special on-sale wine license to an
establishment licensed to do business as a bed and
breakfast inn. This provision of law, enacted in 1987 (AB
2308 [N. Waters], Chapter 615), was intended to permit bed
and breakfast inns to provide small amounts of wine to
registered guests. This law was not intended to place bed
and breakfast inns in a competitive environment with other
licensed businesses.
BPC Section 24045.11 defines "bed and breakfast inn," as an
establishment of 20 guestrooms or less, which provides
overnight accommodations, serves food only to registered
guests, serves only a breakfast or similar early morning
meal, and in which the price of the food is included in the
price of the room. In addition, the predominant
relationship between occupant and owner or operator is that
of innkeeper and guest.
Existing law authorizes bed and breakfast inn licensees to
serve wine purchased from a licensed winegrower or
wholesaler only to registered guests. The law provides
that wine shall not be given away to guests, but the price
of the wine will be included in the price of the room. In
addition, existing law prohibits guests from removing wine
from the grounds of the establishment. The bed and
breakfast inn license requires an original fee of $50 and
an annual renewal fee of $6 for each guestroom in the
establishment until December 31, 2004, and for each year
thereafter the annual fee shall be calculated, as
specified.
Existing law (AB 1437 [Leslie], Chapter 53, Statutes of
2001) also authorizes the Department of ABC to issue a
special on-sale "general" license to any person operating a
bed and breakfast inn, as specified, to serve any alcoholic
beverage, as defined, and to charge a $200 fee for that
license and a renewal fee of $15 for each guestroom in the
establishment, not to exceed $200.
This bill:
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1. Authorizes hotels and motels, as defined, to sell beer
and wine in sealed containers from "food sale areas" for
consumption by guests and their invitees on the
premises.
2. Defines "food sale area" as a food facility that
routinely offers for sale, throughout the area's normal
hours of operation each day to all of the lodging
establishment's transient guests and their invitees,
primarily items like prepackaged sandwiches, salads,
snacks, candy, dairy products, water, soft drinks and
other nonalcoholic beverages in bottles or cans, and
similar food items, as well as, various sundries such as
health and beauty aids, nonprescription drugs, film, and
batteries.
Prior/Related Legislation
AB 1750 (Hagman), 2009-10 Session, is identical to SB 696
(Yee) (see below). The bill is in the Assembly
Governmental Organization Committee.
SB 696 (Yee), 2007-08 Session, a similar measure, would
have enabled "restricted service lodging establishments" to
expand the manner in which they may sell beer and wine to
their guests. The bill died in the Assembly Appropriations
Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/18/10)
California Hotel and Lodging Association (source)
Asian American Hotel Owners Association
California Travel Industry Association
Marriott International, Inc.
ARGUMENTS IN SUPPORT : The bill's sponsor, the California
Hotel and Lodging Association, points out that going back
several decades, the lodging industry was comprised
primarily of "full service" hotels, such as Hiltons,
Sheratons, Westins, and the like. At the same time, the
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motel segment of the industry was still young and there
were very few, if any, bed and breakfast inns.
Additionally, it was very rare that a lodging
establishment, other than a full service hotel, offered any
sort of alcoholic beverage service, or food service, for
that matter. Those full service hotels that desired to
sell alcoholic beverages would typically obtain one of the
two common types of licenses from the Department of ABC -
the one for a restaurant (e.g., bona fide eating place) or
the one for a bar (e.g., public premise).
With the advent of a wide range of "limited service"
lodging establishments (e.g., Fairfield Inns, Residence
Inns, Days Inns, Embassy Suites, etc.), which rarely had
either a bar or restaurant, a problem arose in terms of
meeting guest expectations with respect to the furnishing
of alcoholic beverages. In addressing this issue, the
industry and the Legislature, with the cooperation of the
ABC, responded with enactment of new laws to allow limited
service establishments to keep pace with the evolving
trends in the lodging industry. For example, these
"limited service" lodging establishments are currently
allowed to provide alcoholic beverages from a controlled
access cabinet (mini bar) in guest rooms and they are also
authorized to provide alcoholic beverages to their guests
during a manager's reception.
The sponsor contends that this bill represents a carefully
crafted expansion of existing law to enable "restricted
service lodging establishments" to sell beer and wine from
food sale areas for consumption by guests on the premises.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Bass, Beall, Bill
Berryhill, Tom Berryhill, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Carter, Chesbro, Conway,
Cook, Coto, Davis, De La Torre, De Leon, DeVore, Eng,
Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani,
Gaines, Galgiani, Garrick, Gatto, Gilmore, Hagman, Hall,
Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,
Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal,
Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello,
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Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, John A. Perez
NO VOTE RECORDED: Arambula, Blakeslee, Charles Calderon,
Yamada, Vacancy
TSM:mw 8/18/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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