BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           AB 1322          Hearing Date:     7/14/2015
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          |Author:    |Daly                                                 |
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          |Version:   |4/15/2015    Amended                                 |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Arthur Terzakis                                      |
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          SUBJECT: Alcoholic beverages: licenses: beauty salons and barber  
          shops


          DIGEST:    This bill allows beauty salons and barber shops, in  
          good standing with the California Board of Barbering and  
          Cosmetology (CBBC), to serve their clients limited quantities of  
          beer or wine at no extra charge during normal business hours  
          without obtaining a license or permit from the Department of  
          Alcoholic Beverage Control (ABC). 
            
          ANALYSIS:
          
          Existing law:
          
          1)Establishes the Department of ABC and grants it exclusive  
            authority to administer the provisions of the ABC Act in  
            accordance with laws enacted by the Legislature.  

          2)Makes it unlawful for any person other than a licensee of the  
            ABC to sell, manufacture, or import alcoholic beverages in  
            this state.

          3)Allows the serving of alcoholic beverages without a license or  
            permit in a "limousine" or as part of a "hot air balloon ride"  
            service, provided there is no extra charge or fee for the  
            alcoholic beverages. 

          4)Establishes the Barbering and Cosmetology Act, which provides  







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            for the licensure and regulation of barbers and  
            cosmetologists, including the practice of skin care by  
            licensed estheticians, by the CBBC within the Department of  
            Consumer Affairs.  (Chapter 10 of Division 3 of the Business  
            and Professions Code)



          This bill:

          Provides that an ABC license or permit is not required for the  
          serving of beer or wine as part of a beauty salon service or  
          barber shop service if the following requirements are met:

          1)There is no extra charge or fee for the beer or wine;



          2)The license of the establishment providing the beauty salon  
            service or barber shop service is in good standing with the  
            CBBC;


          3)  No more than 12 ounces of beer or six ounces of wine is  
          offered to a client;

          4)  The beer or wine is provided only during business hours and  
             in no case later than 10 p.m.

          Background

          In October of 1985, the Attorney General issued opinion No.  
          85-701 which held that the operator of a commercial enterprise  
          who offers and provides complimentary alcoholic beverages to  
          guests, customers, or passengers while charging for the services  
          rendered is deemed to have "sold" the alcoholic beverage,  
          thereby necessitating an alcoholic beverage license.  At the  
          time, this opinion affected a large number of California  
          businesses (e.g., limousine and bus services, and  
          bed-and-breakfast inns) which had made a practice of offering  
          complimentary champagne and other alcoholic beverages to  
          passengers and guests as part of their service.  The Legislature  
          has responded to a number of concerns raised by various business  
          entities over the years relative to this matter by enacting  
          narrowly crafted legislation to address the problem.  (See  








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          prior/related legislation listed below.)

          Existing law provides authority for the Department of ABC to  
          issue numerous types of licenses but none are authorized  
          specifically for a "beauty salon or barber" service.  Currently,  
          it is unlawful for any corporation, club, or organization to  
          sell, give, serve, dispense, keep, or allow to be consumed on  
          its premises any alcoholic beverage unless licensed or permitted  
          by law.  This prohibition includes the serving of free alcohol  
          with the purchase of another good or service.  It is also  
          unlawful for any person to keep or consume an alcoholic beverage  
          on any premises open to the public other than as specifically  
          permitted by law.  

          Purpose of the bill:  According to the author's office, many  
          beauty salons and barber shops throughout California offer  
          complementary alcoholic beverages to their customers.  However,  
          because these establishments often lack ABC licenses, they may  
          be in violation of state and local alcohol licensing  
          requirements.  This bill is intended to grant beauty salons and  
          barber shops the opportunity to serve beer or wine to their  
          clients aged 21 or over without an ABC license or permit,  
          provided there is no extra fee charged for the beverage.


          Beauty salons and barber shops.  According to the CBBC, there  
          are a total of 41,830 beauty salon and barber shop location  
          permits issued throughout the State, however, the CBBC location  
          license does not differentiate between a beauty salon and barber  
          shop.  The following services are not under the jurisdiction of  
          the CBBC:  body-piercing, braiding, ear candling, laser  
          services, massage, permanent make-up, medical services,  
          threading and reflexology. 


          Staff comments.  Relaxing with a glass of wine while getting  
          those tootsies pampered at the salon may appear to be a simple  
          act of hospitality but the salon is very likely running afoul of  
          alcoholic beverage licensing laws relating to possession,  
          serving, or sale of alcoholic beverages.  Over the years, other  
          businesses (e.g., art galleries, painting classes, spas, and bed  
          and breakfasts) desiring to offer complimentary drinks with a  
          service have struggled with the decision to either obtain a  
          proper alcoholic beverage license or cease to provide free  
          drinks to their customers. 








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          The privilege to provide alcoholic beverages in a retail  
          establishment is a highly coveted and sought after authorization  
          many businesses desire.  This bill would essentially grant  
          beauty salons and barber shops the privilege of serving  
          alcoholic beverages to their clients without having to go  
          through the standard ABC licensing process which requires  
          applicants to undergo fingerprinting and a thorough background  
          investigation.  In addition, the existing ABC licensing process  
          provides the opportunity for residents and local governing  
          bodies to voice their concerns to the Department of ABC as it  
          pertains to the issuance of a license.  


          This bill grants beauty salons and barber shops the opportunity  
          to serve alcohol (twelve ounces of beer or six ounces of wine)  
          without an ABC license or permit, provided:  (1) there is no  
          extra fee charged for the alcoholic beverage; (2) the  
          establishment's existing salon/barbering license is in good  
          standing with the CBBC; and, (3) the beer or wine is served  
          during normal business hours. 


          As currently drafted, it is unclear how alcohol limitations  
          related to underage drinking and excess use would be enforced.    



          Prior/Related Legislation
          
          SB 346 (Harman, 2011) would have authorized the serving of  
          alcoholic beverages without a license or permit as part of a  
          "gondola ride" (boat) service. (Held in Assembly Appropriations  
          Committee at request of the author)


          AB 2416 (Governmental Organization Committee, Chapter 639,  
          Statutes of 1998) provided that a license or permit is not  
          required for the serving of alcoholic beverages as part of a hot  
          air balloon ride service, provided there is no extra charge or  
          fee for the alcoholic beverages.


          SB 1546 (Beverly, Chapter 1354, Statutes of 1986) provided that  








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          a license or permit is not required for the serving of alcoholic  
          beverages in a limousine provided there is no extra charge or  
          fee for the alcoholic beverages.


          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


            SUPPORT:  

          Drybar 
          18|8 Fine Men's Hair Salon of Playa Vista

          OPPOSITION:

          Alcohol Justice
          Asian American Drug Abuse Program, Inc.
          California Council on Alcohol Problems
          Los Angeles Drug and Alcohol Policy Alliance
          Partnership for a Positive Pomona
          Paso por Paso
          Pueblo y Salud
          San Rafael Alcohol and Drug Coalition
          The Wall Las Memorias Project
          United Coalition East Prevention Project
          Youth for Justice
          Numerous individuals

          ARGUMENTS IN SUPPORT:  Proponents claim that AB 1322 will enable  
          small locally owned and operated salon and barbering businesses  
          the opportunity to provide their customers with quality services  
          and experiences.


          ARGUMENTS IN OPPOSITION:   Opponents are concerned about the  
          unintended consequences of allowing alcohol consumption at  
          beauty/barbering establishments.  For instance, opponents  
          question whether the ABC is capable of monitoring the thousands  
          of licenses that have been issued under the CBBC.  Opponents  
          also point out that AB 1322 makes no mention of age requirements  
          or proper "responsible beverage service" training of persons  
          pouring the alcohol.  Furthermore, opponents believe that the  
          alcohol industry may begin marketing and distributing their  
          products through beauty/barbering establishments as another  








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          means of public tastings.