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 ----------------------------------------------------------------- |Author: |Daly | |-----------+-----------------------------------------------------| |Version: |4/15/2015 Amended | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Arthur Terzakis | | | | ----------------------------------------------------------------- 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 AB 1322 (Daly) Page 2 of ? 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 AB 1322 (Daly) Page 3 of ? 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. AB 1322 (Daly) Page 4 of ? 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 AB 1322 (Daly) Page 5 of ? 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 AB 1322 (Daly) Page 6 of ? means of public tastings.